Oracle, Meta Financing Methods Mirror Enron Era, Steve Eisman Says

“Big Short” investor Steve Eisman says financing techniques associated with Enron and the 2008 financial crisis are returning as Big Tech uses special-purpose vehicles and guarantees to fund the artificial intelligence boom. “Off-balance-sheet techniques are back with a vengeance in the new world of AI,” Eisman said on The Real Eisman Playbook Friday. ” Why Eisman Is Worried Eisman said his concern goes beyond the circular financing debate around chipmakers investing in companies that buy their products. He is focused on project debt sitting outside a company’s balance sheet while it retains significant economic exposure.

He said one incentive is protecting credit ratings, pointing to Oracle Corp. (NYSE: ORCL ), which S&P downgraded to BBB-, one notch above junk, on July 9. 7 billion. Debt tied to its $18 billion Project Jupiter data center has also traded around 90 cents on the dollar, reflecting concerns about the company’s leverage.

Meta Platforms Inc. (NASDAQ: META ) offers another example. Meta owns 20% of its Hyperion venture, while Blue Owl-managed funds own 80%. 3 billion in debt to fund the project.

Meta can lease the site for up to 20 years and bears costs tied to delays and overruns, while the project debt stays off its balance sheet. “That’s some fancy schmancy footwork that’s reminiscent of bad times past and it doesn’t pass the smell test,” Eisman said. Ernst & Young flagged Meta’s decision to keep the venture off its balance sheet as a “critical audit matter” in Meta’s 2025 annual report, saying the assessment required significant judgment. “Sometimes accounting language illuminates and sometimes it obscures.

Here it obscures,” Eisman said. He did not accuse Meta of fraud. AI’s Debt Buildout Grows The Financial Times estimates Big Tech companies have provided guarantees backing as much as $300 billion of debt tied to AI data centers and chips. Eisman said soaring AI infrastructure costs are giving companies an incentive to keep debt and related exposure off their balance sheets to protect credit ratings.

“That’s why off-balance-sheet financing is so tempting and has come back in vogue,” he said. Nvidia Corp. (NASDAQ: NVDA ) shows the scale of the buildout. Its Data Center revenue jumped 117% year over year to $89 billion last quarter as GPU demand continued to outstrip supply.

Prediction market traders remain far less concerned than Eisman. A Polymarket contract puts the chance of an AI industry downturn by Dec. 4 million traded. The contract requires three triggers from a list that includes a 50% Nvidia decline, a 40% SOXX drop and an OpenAI or Anthropic bankruptcy.

Venture capitalist Paul Kedrosky last week compared AI infrastructure financing with the run-up to the 2008 financial crisis, but on a “ vastly larger scale. ” Image: Shutterstock Read Also: Faraday Chairman Warns Cutting China Out of US Robot Supply Chain Too Fast Could Backfire