Big Tech AI Spending Tops $1tn Since 2023
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- Google, Amazon, Microsoft, and Meta collectively spent $1.1tn on capital investments from the start of the 2023 AI boom through end of June 2026, with $745bn earmarked for 2026 alone — mostly on data centers, advanced chips, and power infrastructure.
- Meta signed $233bn in new commitments in the quarter ($96bn in data center leases, $112bn in purchase commitments, $25bn in new debt) and added another $68bn in July data center leases, yet its stock fell 8% on Thursday for lacking a clear compute-leasing strategy.
- Google posted negative $6bn of free cash flow — its first quarter burning cash since going public over two decades ago — even as its cloud unit added $11bn in revenue, with future financial commitments ballooning by about $500bn in three months.
- Microsoft signed more than $130bn in new data center leases in Q2, part of roughly $900bn in total new AI-related obligations agreed by Google, Microsoft, and Meta in the three-month period alone.
- Apple, sitting out the AI infrastructure race, saw its stock fall 6.3% on Thursday after warning of lower sales and margins caused by memory chip shortages triggered by the AI spending rush.
- The four hyperscalers' combined free cash flows fell to a decade low of just $7bn in the period, with only Microsoft and Meta bringing in more than they spent; Amazon's Andy Jassy told investors to expect "free cash flow headwinds" until new data centers come online.
- OpenAI and Anthropic's ability to keep raising funds is critical to the hyperscalers' multiyear compute commitments, as both AI labs prepare for public listings while relying on the cloud giants.
Why it matters: Google, Amazon, Microsoft, and Meta have shifted from capital-light tech firms into the world's biggest infrastructure spenders, with combined free cash flow crashing to a decade low of $7bn. Apple's 6.3% stock drop demonstrates how the AI-fueled chip squeeze punishes even bystanders like the iPhone maker.
