Big Tech AI Spending 2026: Google, Microsoft, Meta & Amazon's $700B Capex Surge Triggers Free Cash Flow Crisis
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Big Tech’s $700 Billion AI Spending Spree in 2026: Massive Investments Trigger Free Cash Flow Warnings
Published February 7, 2026 | By Kishwar Khan
The world’s largest technology companies — Alphabet (Google), Microsoft, Meta, and Amazon — are on track to invest close to $700 billion in capital expenditures this year, marking a dramatic increase of more than 60% from 2025 levels. The primary driver? Artificial intelligence infrastructure, including data centers, advanced chips, and high-speed networking.
While executives and analysts view this aggressive push as essential for capturing a once-in-a-generation opportunity in AI, the immediate financial impact is raising eyebrows. Free cash flow across these four giants has already declined, and 2026 projections point to even steeper drops as upfront costs outpace revenue growth.
Breaking Down the Numbers: Who’s Spending What
- Amazon leads with an expected $200 billion in capex, potentially resulting in negative free cash flow ranging from $17 billion to $28 billion.
- Alphabet (Google) plans up to $185 billion, with some forecasts suggesting it could climb toward $250 billion in 2027. Free cash flow may plunge 90% to around $8 billion.
- Meta is targeting up to $135 billion, with analysts predicting an almost 90% FCF decline and possible negative figures in 2027–2028.
- Microsoft is increasing spending at a more moderate pace, facing a projected 28% drop in free cash flow before a potential recovery in 2027.
A Shareable Insight
“If you're going to pour all this money into AI, it's going to reduce your free cash flow.”
— Jake Dollarhide, CEO of Longbow Asset Management
Why the Cash Burn Matters
These companies currently hold over $420 billion in combined cash reserves, giving them significant breathing room. However, several have already begun tapping debt markets (Alphabet issued $25 billion in bonds in late 2025), and more equity or debt raises could follow.
Wall Street remains largely optimistic, pointing to strong enterprise demand and trillion-dollar long-term revenue potential in AI. Yet uncertainty lingers: how sustainable is the current growth, and can these giants maintain their dominance against nimble AI startups?
Source: This analysis is based on reporting from CNBC (February 6, 2026).
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