Big Tech's $740B AI spend sparks investor anxiety
big tech companies plan to spend over $740 billion on ai infrastructure this year, but investors are getting nervous about negative free cash flow and returns.
over the past two weeks, alphabet, amazon, meta, and microsoft have announced plans to spend more than $740 billion on capital expenditures this year, which is largely being driven by ai infrastructure spending, including data centers and chips. however, investors are growing increasingly concerned about the impact on free cash flow and debt. alphabet reported negative free cash flow of $9.1 billion in the third quarter, while amazon reported negative free cash flow of $42.4 billion over the past 12 months. meta also reported negative free cash flow of $2.1 billion in the third quarter. despite this, demand for ai compute remains strong, with google, amazon, and microsoft all seeing gains in their cloud businesses.