The Deep End: 2025 Alternative Investments Review

And then just a couple of quick slides on – another topic that we'll be talking more about in the Outlook, which is the debt explosion in the fourth quarter related to all the hyperscalers and data centers.

The debt markets were a pretty boring place until the fourth quarter as it related to things related to data centers.

And then all of a sudden, let's see if I can get this thing to work, there was an absolute explosion of about 150 billion dollars of borrowing from meta amazon google and oracle and here we're including all the debt including the hotly debated meta blue hour blue owl structure that that meta convinced a bunch of uh their accountants to allow them to avoid consolidating to but we're including that here.

So here you can see this explosion at 150 billion on top of what was really kind of 50 billion on a year-to-date basis.

That's a lot of borrowing.

Now, to be clear, The net debt to EBITDA ratios for most of the big AI-related companies are still pretty low.

Oracle is, and maybe IBM are the exceptions.

The rest of them are very low, if not negative.

Google, NVIDIA, AMD, for example, have more cash and cash equivalents than short and long-term debt.

So those ratios are zero.

But these numbers are starting to move, and the numbers for Meta and Oracle in particular were low.

significant relative to their amount of cash flow.

And unsurprisingly, we're starting to see the credit default swap markets reflect that.

Here you can see the spreads zooming on Oracle and also Intel with smaller adjustments for the rest of the AI companies.

Anyway, we'll be talking more about that in the Outlook.