America’s largest cloud and internet platforms have stacked on roughly $350 billion in new borrowing over five years to finance a breakneck buildout of AI infrastructure, even as investors start to question the pace of spending. Combined interest costs topped $10 billion last year—more than double 2019—while Google still threw off $64 billion in operating cash flow after capex at the March quarter’s end. By contrast, Amazon’s free cash flow turned negative and Oracle, now rated BBB- by S&P, faces accelerating cash burn with leverage approaching 2.5 times sales. Bond buyers balked at parts of Amazon’s $25 billion deal, and equity performance has split—Alphabet outpacing the S&P 500 while Microsoft and Oracle have dropped more than 20%—leaving upcoming earnings to clarify funding plans, the durability of AI demand and the timing of returns. Intel’s missteps in AI chips stand as a reminder that heavy spending without competitive payoff can erode market share and profitability.
Tech Titans Pile On $350 Billion in Debt to Power a $725 Billion AI Buildout
- Trending
- Comments
- Latest
