Big Tech’s AI Spending Boom Squeezes Free Cash Flow
The companies raised $326 billion in debt this year as AI infrastructure spending outpaced operating cash flow, according to S&P Global Market Intelligence.
- On Friday, Oct 30, the five largest US tech companies reported record operating cash flow of $542.9 billion yet returned the smallest share of capital to shareholders in at least 15 years as AI spending squeezed buybacks.
- Surging artificial intelligence investments caused capital spending to double to $556.9 billion, leaving the five firms with a combined free cash flow deficit of $14 billion for the first time since 2011.
- The five companies cut repurchases 83% to $13.6 billion from $81.8 billion a year earlier, while dividends rose to $37 billion from $33.9 billion during the first nine months of 2026.
- Alphabet and Meta Platforms halted buybacks entirely in 2026, while Microsoft cut its quarterly repurchases to $4.4 billion from $5.7 billion as $50.6 billion in payouts were funded through debt or share sales.
- Forward AI data-center commitments across the five companies total more than $3 trillion, with Amazon pricing $25 billion in bonds on October 29, its first US dollar bond sale since 2017.
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Deutsche Welle
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