This is going to separate the wheat from the chaff in regards to who can negotiate a contract and who can't.

The big tech companies have typically used Special Purpose Vehicles ("SPVs") [1] for their hyperscalar investments and there's a lot of insulation from financial woes. Here's an example structure:

1. One subsidiary (or SPV) builds the physical building the data center is in. That's all it does;

2. The main SPV will lease the building from (1). It borrows a bunch of money for the GPUs and other hardware.

So, done right, if a hyperscalar fails, the company only loses the hardware.

Has Oracle done this correctly or have they screwed up and the debtholders have rights to Oracle itself in the case of a default?

The bigger issue for the economy is similar to 2008. There is so much AI debt that it's impossible to avoid. Mutual funds, pension funds, retirement accounts, etc will all be exposed to it so you can get a cascading economic collapse.

[1]: https://www.ernestchiang.com/en/posts/2025/off-balance-sheet...

Yes. But even with these SPVs is was largely about keeping the liabilities off the hyperscalers balance sheets. GAAP has some rules being exploited there on keeping commitments off the balance sheets until they’re delivered. But the big players are still very exposed. The WSJ recently reported there’s are 3 trillion in these little gems hiding “off the books” that will start popping up as real liability soon. It’s a huge mess.