AI Expansion Hits Financial Limits as Hyperscalers Exhaust Cash Reserves

The rapid buildout of artificial intelligence infrastructure has entered a more financially precarious phase for major technology companies. For the first two years of the AI boom, hyperscalers — large cloud and tech giants — comfortably funded expansion using their own operating cash flows. That self-funded model is now no longer sustainable as capital demands continue to escalate. Companies are increasingly being pushed toward debt financing, raising concerns about long-term financial exposure. A critical threshold, described as the '5% danger line,' is emerging as a key risk indicator for the sector's debt levels.