AI leads the Fed’s risk survey as data-center borrowing climbs

Artificial intelligence was the most frequently named risk in the Federal Reserve’s November 13 Financial Stability Report. In September and October, 87% of 23 market contacts surveyed by the New York Fed named AI as a potential shock to the U.S. financial system, up from 50% in the spring. The report also estimates how much companies borrowed to build computing infrastructure and counts some of the leases and guarantees behind those projects. It gives readers following the buildout a way to look past corporate debt balances to deals that can put companies on the hook for years.

Who was surveyed

The New York Fed asked people at banks, investment funds, broker-dealers and advisory firms about shocks that could do the most harm over the next 12 to 18 months. A correction in risk assets was mentioned by 52% of respondents and a rise in long-term rates by 48%. The figures count mentions across the group. They give no odds that a particular shock will happen.

A year earlier, 30% of 23 contacts named AI. In the spring, 10 of 20 did, while geopolitical risks and an oil shock received more mentions. This fall, contacts cited high stock valuations, AI-enabled cyberattacks and complicated financing arrangements. The report presents those concerns as the views of the people surveyed.

The contracts behind the buildout

The Fed counted more than $680 billion in debt issuance tied to advanced computing through October 2026, compared with $130 billion in all of 2023. Related borrowing reached about 31% of investment-grade corporate debt issuance by nonfinancial companies, from under 6% in 2023. The report’s figures cover several kinds of borrowing, including corporate bonds, project finance and some privately issued securities.

The Fed separately estimated more than $1.1 trillion of public debt outstanding as of October. Issuance tracks how much companies raised in a period. Outstanding debt tracks what remains unpaid. Large deals also take place in private credit markets, where the report’s figures offer a less complete view.

A large cloud provider can sign a long lease before a data center opens. The developer can then use its expected rental income to raise money for construction. In a separate report published November 12, the U.S. Office of the Comptroller of the Currency identified construction delays, access to power and the risk that equipment becomes outdated as factors that can affect project credit risk. Collateral and expected rental income can matter even when the borrower has yet to bring the facility into service.

The Fed looked at seven large tech companies and found more than $1 trillion in leases that had yet to start, as of the second quarter of 2026. Other commitments exceeded $2 trillion, including contracts that require payment even when a buyer uses less capacity than it reserved and guarantees of an asset’s future value. The figures tally future payments before discounting them to present value, the basis used for recorded debt.

Recent filings illustrate how companies disclose those leases. Alphabet reported $130.5 billion in future payments for leases that had yet to start as of September 30, chiefly for data centers and energy infrastructure. The leases are scheduled to start from 2026 through 2031. Microsoft separately disclosed $364.6 billion in leases that had yet to start, mainly for data centers, as of the same date. Some of those leases are conditional.

Where the banks come in

The report says a downturn could leave the largest tech firms absorbing some losses through their contracts with smaller companies. Their full exposure could also be greater than the liabilities on their balance sheets suggest. The Fed counted close to $1 trillion in exposure at the largest U.S. bank holding companies across a group that includes large technology companies, developers, related private-credit vehicles and utilities. That group covers more than direct loans for construction.

The Fed described the banking system as sound and resilient in its own assessment. The report generally reflects information available through October 28 and says the bank exposures are evaluated in annual supervisory stress tests.