GoKawiilBig Tech's $740 billion AI capex triggers investor pullback as Alphabet posts negative cash flow
Alphabet, Amazon, Meta and Microsoft have disclosed plans to spend over $740 billion combined on capital expenditures this year, largely tied to AI data centers and chips. Alphabet reported negative free cash flow of $9.1 billion in the third quarter, its second straight quarterly loss on that measure, even as its quarterly capex rose to $51.4 billion. The news hit markets Friday, with the Nasdaq falling 2.9% and chip stocks including Nvidia, Broadcom and Qualcomm declining sharply, following Alphabet's 12% drop the prior day that erased $500 billion in market value.
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The sell-off suggests investor patience with unprofitable AI spending may be thinning after years of rewarding big capex as a growth signal. Alphabet's situation illustrates a broader risk analysts are flagging: companies are pouring cash into AI infrastructure while AI features like Google's AI Mode could simultaneously erode the core revenue, such as search advertising, that funds that spending. If this pattern spreads across Amazon, Meta and Microsoft, it could reshape how markets value AI investment going forward.
- Big Tech plans over $740 billion in 2025 capex, mostly tied to AI infrastructure
- Alphabet posted negative free cash flow for a second straight quarter despite rising capex
- Nasdaq and chip stocks fell sharply as investor confidence in AI spending wavered
Source: techcrunch.com — Rebecca Bellan, 2026-10-30
Published there as: “Cracks are emerging in the AI spending boom”
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