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Chart of the Month
Contracted demand is driving AI investment
Hyperscaler Cloud Backlog & RPO ($ billions)1
Cloud backlog is signed cloud demand awaiting delivery and revenue recognition.
RPO (Remaining Performance Obligations) is contracted future revenue awaiting recognition.
Hyperscalers continue to deploy significant capital toward the infrastructure needed to support cloud and AI growth, with spending anchored in firm, contractual demand rather than speculative buildout. Cloud backlogs and Remaining Performance Obligations (RPOs) across Amazon, Alphabet, Oracle, and Microsoft have increased materially, reflecting the scale of customer commitments already in place.3,4
While hyperscaler capex levels may appear significant, the alignment between contracted demand and near-term revenue realization suggests a clear path to monetization. With approximately $2 trillion of cloud backlog and RPO and an estimated 25–50% expected to convert into revenue over the next 12–24 months, the data points to continued momentum in cloud and AI investment.1
Understanding the broader private credit opportunity
Private credit encompasses a broad range of financing solutions that support consumers, businesses, housing, transportation, and essential industries throughout the economy. As the opportunity set continues to expand, investors are increasingly exploring areas beyond traditional corporate lending alone to gain exposure to a broader range of income and return drivers.
Asset-based finance offers exposure to contractual cash flows backed by diverse pools of financial and hard assets, including consumer receivables, small-business finance, equipment leasing, aviation, and residential finance. By financing a range of real-world economic activity, asset-based finance can help broaden the opportunity set available to investors within private credit.
Explore net lease as a complement to private infrastructure
Why net lease may resonate with infrastructure-oriented investors
In today's market environment, investors continue to focus on strategies that can provide resilient income, downside protection, and exposure to essential sectors of the economy. As portfolios evolve, many are exploring how different real asset strategies may complement one another while pursuing similar long-term objectives.
Across private markets, the conversation is expanding beyond traditional asset classifications toward the underlying characteristics that investors value most, including income durability, inflation awareness, and diversification. Understanding where these attributes overlap and where they differ can help investors evaluate the role of real assets within a broader portfolio.
Blue Owl HomeCourt invests in the Cleveland Cavaliers
Blue Owl HomeCourt Partners has announced a minority equity investment in the Cleveland Cavaliers, marking the sixth NBA franchise investment for the strategy since its launch. Through its strategic partnership with the NBA, HomeCourt provides institutional capital to the league ecosystem and seeks to support long-term growth across professional basketball.
The Cavaliers investment expands HomeCourt's existing NBA franchise holdings, which include investments in the Minnesota Timberwolves, Charlotte Hornets, Atlanta Hawks, Sacramento Kings, and Phoenix Suns. The announcement reflects HomeCourt's continued activity within the NBA ecosystem and its approach to providing investors with diversified access across NBA franchises.
1. Source: Amazon, Alphabet, Oracle, and Microsoft public filings.
2. Contractual Revenue reflects cloud backlog (Amazon, Alphabet) and Remaining Performance Obligations (Microsoft, Oracle) as reported by each company in their respective public filings.
3. Contracted future cloud revenue from signed customer commitments not yet delivered or recognized. Most commonly used by Amazon and Alphabet as a forward demand indicator.
4. A GAAP metric capturing the total contracted value of future goods and services not yet recognized as revenue, including both deferred revenue and unbilled commitments. Reported by Oracle and Microsoft.
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This communication is for informational purposes only and is not an offer or a solicitation to sell or subscribe for any fund and does not constitute investment, legal, regulatory, business, tax, financial, accounting or other advice or a recommendation regarding Blue Owl Capital Inc. (“Blue Owl”), its affiliates and investment program, funds sponsored by Blue Owl, including the Blue Owl Credit, Real Assets, and GP Strategic Capital Funds (collectively the “Blue Owl Funds”) as well as investment held by the Blue Owl Funds.
