Cracks are emerging in the AI spending boom

Alphabet, Amazon, Meta, and Microsoft have outlined more than $740 billion in capital-expenditure spending for 2026, much of it directed toward AI infrastructure such as data centers and chips. Investors have grown more concerned about the effect of those outlays on free cash flow, debt, and eventual returns. On Friday, the Nasdaq fell 2.9%; Nvidia declined 4%, Broadcom fell more than 5%, and Qualcomm dropped 11%. Alphabet lost 12% on Thursday, erasing $500 billion in market value, before falling again. Alphabet reported negative free cash flow of $9.1 billion in the third quarter while quarterly capex reached $51.4 billion, and it expects to spend up to $205 billion this year. Amazon reported negative free cash flow of $42.4 billion over the prior 12 months and expects $220 billion in capex this year. Meta reported negative third-quarter free cash flow of $2.1 billion and guided for up to $145 billion in annual capex. Microsoft reported $18.6 billion in positive free cash flow, though it said delayed third-party capacity held capex to $45.2 billion. Microsoft, Alphabet, Amazon, Meta, and Oracle raised a combined $326 billion in debt during 2026, triple the prior year’s total, according to S&P Global Market Intelligence. Cloud businesses at Google, Amazon, and Microsoft continued to grow, but the costs of supplying AI computing capacity have raised investor concerns. Blackstone has warned investors that Anthropic may not qualify for an investment-grade credit rating after its planned IPO, the Financial Times reported.