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Transparency has been a problem as tech giants plow hundreds of billions of dollars into developing massive data centers for training and running AI models.
Little has been reported on how power supply fits into this accounting challenge. When Alphabet reported last month that it expected to account for a new $9.9 billion, 20-year power purchase agreement starting in 2027 as a lease, I dug in.
Large tech companies are just beginning to share financial details on the massive amounts of power they’ve locked in to run their AI data centers. But for some investors, those details aren't nearly enough.
Investors want to know the volume of gigawatts the companies are committing to and what they’re paying for it, among several other things, Krishna Chintalapalli, a portfolio manager at asset manager Parnassus Investments, told me.
“We’re starting to get more disclosure, but it’s still an evolving situation,” he said. “Some investors are giving them credit based on their past track record and others are saying, ‘Hey, I need more disclosure on this.’ ”
David Gonzales, vice president of the corporate finance group at Moody’s Ratings, said it would be easier to compare companies’ power agreements and overall data-center accounting if there were more specific rules.
The Financial Accounting Standards Board’s response? The FASB hasn’t received any requests to address general accounting issues around data-center arrangements, a spokeswoman said.
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