How Long Can Big Tech’s ‘AI Spending Spree’ Last?
Big Techs AI spending spree nears 740B by 2026 outpacing cash flow. With debt fueling the boom bond market risks loom.
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When tech giants’ capital expenditures begin to devour all operating cash flow, the market no longer needs to debate whether this spending is worthwhile, but instead worries about whether these giants can hold on—or rather, at this pace, how much longer can they last?
Goldman Sachs points out that, including Oracle and CoreWeave, the combined capital expenditure guidance for hyperscale cloud providers in 2026 will soar to $740 billion. What does this mean? Not only is this a 70% increase from 2025, but it’s also double what the market previously expected. More strikingly, this figure is approaching these companies’ total annual operating cash flow. In other words, the giants’ current cash generation basically equals their cash burn—not a drop is left for shareholders.
Bank of America’s model calculations further confirm this stark reality: by 2026, only Microsoft’s operating cash flow will still cover capital expenditures; Meta’s net debt will even turn positive. For the remaining companies, even if they completely halt buybacks, free cash flow will be critically low.
