People familiar with the matter said that Alphabet has provided guarantees for data center leases for about 10 projects with a total of 2.4 gigawatts of computing power. None of the projects have yet been completed, and the guarantee obligation has not yet been actually triggered. Jordan Chalfin, head of the technology industry at CreditSights, a credit research institution owned by Fitch, warned that there is no need to worry too much about Alphabet's nominal guarantee amount at this stage. In an interview, he said, “The amount disclosed is the biggest potential loss in theory and needs to be viewed objectively. At the same time, the company has various risk mitigation methods.” Alphabet's financial report states that once the lessee breaches the contract, the company has multiple disposal options: it can undertake leasing for personal use or use by its own customers to supplement scarce computing power resources; it can also sublease the computer room to a third party. Most lease agreements last up to 15 years, and potential risk exposure decreases year by year over time. The company even has the right to voluntarily terminate the underwriting promise, but people familiar with the matter revealed that the cancellation of the contract will probably require a one-time payment of a large compensation to compensate bondholders who initially relied on this guarantee to issue bonds; this compensation will be converted into shares in the corresponding project, and the shareholding ratio will be determined based on the payment amount and the total investment amount of the project.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.