Can Big Tech's spending spree on AI infrastructure last?

Alphabet, the parent company of Google, is doing something it hasn’t done in 20 years: offering new equity in the company. It plans to sell $80 billion in stock to invest in — you guessed it — AI.

Big Tech is expected to spend more than $700 billion on AI infrastructure this year. And the spending spree is hitting a turning point, though, as it consumes almost all of the massive revenues these companies bring in.

Before the AI era, Alphabet, Microsoft, Amazon, and Meta were basically cash-printing machines. They made so much more money than they spent that they regularly bought back their own stock, giving billions to their shareholders, said Jacob Bourne, a tech analyst at Emarketer.

“These were the biggest cash giants of the modern economy, and now, in just a matter of a couple years, that's changing,” he said.

Their free cash flow — the amount of revenue left over after infrastructure investments — is dwindling, he said. Amazon is already burning more cash than it makes, and Meta will likely follow later this year.

If current patterns hold, Alphabet could see spending exceed cash flow next year, said Daniel Newman, CEO of Futurum Group.

“Every one of these businesses is firmly under the belief that if they don't spend, that there is an existential risk to their business's longevity,” he said.

To continue blazing ahead in the AI race, tech companies have moved beyond spending revenues — relying on corporate bonds, joint ventures with private creditors, and now equity offerings to ratchet up the spending.

“It’s this sort of aggressive prisoner's dilemma of, ‘we will not be outspent,’” Newman said.

The stock market has largely rewarded these moves, according to University of Michigan business professor Erik Gordon. But he warned that the mood could change.

“You’ve got to get some kind of return on that money, and when the money that you've put in is that big, you got to get a lot of money back,” he said.

Investors are going to want to see that AI can be a cash-printing machine, too.

More on the AI economy

• From August 2025: Spending on AI data centers could run into the trillions of dollars by the end of the decade

• From January 2026: More Americans concerned about AI, even as it drives economy

• From January 2026: Is artificial intelligence becoming too big to fail?

• From January 2026: Exploring the AI boom, on the ground in Silicon Valley

• From February 2026: More spending on data center construction had limited impact on GDP