Alphabet, Amazon, Meta and Microsoft plan more than $740 billion in capital expenditures this year, which Wall Street reads as AI infrastructure spending, first reported by TechCrunch. That commitment is drawing scrutiny as three of the companies report negative free cash flow, while investors question debt levels and whether the outlays will generate enough returns.
Investors initially rewarded large AI outlays as a sign of confidence in the technology’s growth. They are now weighing negative free cash flow, mounting debt and uncertainty over whether the investments will generate enough returns.
Alphabet reported $9.1 billion in negative free cash flow in the third quarter, its second consecutive quarter in the red, while quarterly capex reached $51.4 billion. It expects to spend up to $205 billion this year, with spending expected to keep rising in 2027. Google’s Search advertising business makes up roughly half of Alphabet’s revenue and grew 12%, its weakest pace in five quarters; AI Mode, a chatbot feature built into Search, is eating into that business.
Amazon reported negative free cash flow of $42.4 billion over the past 12 months, compared with $14.8 billion in positive free cash flow the year before, and expects $220 billion in capex this year even as AWS revenue grew 39%. Meta reported negative free cash flow of $2.1 billion in the third quarter and guided to as much as $145 billion in capex, while ad revenue grew 26%.
Microsoft was the exception, recording $18.6 billion in positive free cash flow in its latest quarter and $45.2 billion in capex, below its $50 billion projection. It blamed the gap on delays in capacity from third-party providers, not an intentional pullback from AI spending; shares of smaller companies that rent out AI computing power sank.
Funding also extends beyond company profits. Microsoft, Alphabet, Amazon, Meta and Oracle raised a combined $326 billion in debt in 2026, triple the amount raised last year, according to S&P Global Market Intelligence.
Demand remains strong: Google, Amazon and Microsoft all reported gains in their cloud businesses. The tension is between continued demand for compute and the costs of serving it.
Anthropic filed to go public earlier this week, and its future growth depends on securing substantial amounts of compute. The Financial Times reported Friday that Blackstone warned investors Anthropic might not qualify for an investment-grade rating after its IPO, which might leave it more reliant on hyperscalers and third parties to fund infrastructure.