Microsoft's off-balance-sheet lease commitments for data centers are a hidden liability that could negatively impact its stock.

All the major tech companies are now spending more than they make combined. They're spending more on AI than their whole cash flow, which is why they're borrowing.

Because if Microsoft builds a data center, that's a huge expense on their financial statements and their stock will go down. Microsoft just signs a contract promising to rent it for the next several years.

And that promise is what makes this whole thing financable.

Now, that promise does not show up as debt on Microsoft's balance sheet. According to Goldman Sachs, these companies have about $1 and a half trillion dollars in lease commitments, but one trillion of that does not appear on their balance sheets at all.

Which is why when you look up Microsoft Financials, you're not going to see a trillion dollars of obligations.