Investors push back as AI infrastructure spending and borrowing climb
Free cash flow turning negative at several big tech firms could make the pressure on AI funding harder to ignore, including for Anthropic's planned IPO.
Investors have begun pushing back on the enormous AI infrastructure budgets of the large technology companies, with Alphabet, Amazon, Meta and Microsoft collectively planning more than $740 billion in capital spending this year. Free cash flow is turning negative at several of them, so cash out now exceeds cash in, while Alphabet's search advertising growth has slowed to 12%, its weakest pace in five quarters, as its own AI features compete with the business. Markets reacted sharply on Friday, with the Nasdaq down 2.9% and Alphabet losing 12% the previous day. Borrowing is also climbing, as Microsoft, Alphabet, Amazon, Meta and Oracle have raised $326 billion in debt so far in 2026, triple last year's total. The pressure could weigh on Anthropic's planned IPO, since Blackstone reportedly warned the company may not win an investment-grade rating and could rely more on hyperscalers and third parties for infrastructure funding.
Why it matters
The four largest technology spenders are now building AI capacity faster than their cash flow can cover, and debt is filling the gap. For investors, the question is whether AI features will bring in enough new revenue to justify the outlays. Alphabet's slowing search advertising shows that AI tools can also erode the existing business they were meant to protect. Anthropic's funding path is a useful test case, since a rating doubt from Blackstone suggests lenders are not treating the AI build-out as a safe bet.
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