AI Supply Chain Faces Over $1 Trillion in Commitments, BIS Signals Over-Investment Risk

According to WSJ and the Bank for International Settlements (BIS), since mid-2025, major tech giants including Google, Microsoft, Amazon, and Oracle have accumulated over $1 trillion in deferred revenue from long-term supply contracts, more than double previous levels. Oracle alone holds $638 billion in unfulfilled contract obligations from its agreement with OpenAI, according to its latest quarterly filing.

BIS warned in its latest economic report that while companies use long-term contracts to secure future capacity amid AI chip shortages, these agreements may expose them to significant losses if demand weakens. Historical precedent suggests such contracts often face renegotiation or suspension during market downturns, as exemplified by microcontroller maker Microchip Technology, which terminated its long-term supplier commitment program after demand reversed post-2021.