{"id":96973,"date":"2026-10-30T00:01:00","date_gmt":"2026-10-30T06:01:00","guid":{"rendered":"https:\/\/www.opinionpublica.tv\/portada\/?p=96973"},"modified":"2026-10-29T22:07:31","modified_gmt":"2026-10-30T04:07:31","slug":"big-techs-data-center-blitz-is-burning-through-cash-and-scaring-wall-st","status":"publish","type":"post","link":"https:\/\/www.opinionpublica.tv\/portada\/big-techs-data-center-blitz-is-burning-through-cash-and-scaring-wall-st\/","title":{"rendered":"Big tech\u2019s data center blitz is burning through cash and scaring Wall St."},"content":{"rendered":"\n
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Four of the tech industry\u2019s biggest companies set a spending record in the last quarter as they raced to build artificial intelligence, leading to a worrisome new milestone: Most of them are spending more cash on data centers than they get from running their businesses.<\/p>\n\n\n\n

Over the past two weeks, Amazon, Microsoft, Google and Meta said they were on track to spend more than $720 billion this year on data centers and other capital expenses \u2014 roughly triple what they spent just two years ago. And all are expected to spend even more next year. The investments are so large, the A.I. boom accounts for much of the resilience in the U.S. economy.<\/p>\n\n\n\n

The buying binge has sent the companies scrambling to fund their ambitions by taking out loans and in some cases selling more stock to get the cash they need. While their core businesses generally remain healthy, those moves have unsettled investors who worry whose bets will pay off.<\/p>\n\n\n\n

Google reported underwhelming results Wednesday, and by the time markets closed on Thursday, Google\u2019s stock had fallen more than 12 percent, erasing its gains for the year. Then, after Amazon reported its results showing heavy spending, its shares traded down, too, falling about 5 percent in after-hours trading. Last week, Meta\u2019s shares fell 7 percent after its results showed it was using so much cash that the company was issuing new stock to raise funds.<\/p>\n\n\n\n

\u201cSlight differences is causing a lot of volatility,\u201d said David Tsui, a technology credit analyst at S&P Global Ratings. He said there could be several more years of uncertainty because \u201cyou\u2019re spending now and a lot of the return is going to be years down the road.\u201d<\/p>\n\n\n\n

It\u2019s not just some of the largest tech companies that are making this giant bet. Oracle and SpaceX have drastically boosted their spending, and borrowing, and now have capital expenses quickly approaching their much larger rivals.<\/p>\n\n\n\n

Investors have increasingly kept an eye on a metric known as free cash flow, which looks at how much cash a company has after paying for both its day-to-day costs and for new capital expenses. For every company but Microsoft, free cash flow has turned negative, a sign of just how much they are banking that their A.I. bets will pan out.<\/p>\n\n\n\n

If the companies keep adding to their spending faster than they can increase their sales and cash, \u201cthen we get a little bit more nervous,\u201d Mr. Tsui said.<\/p>\n\n\n\n

On Thursday, Amazon became the latest big tech company to report its quarterly results. It had $201.9 billion in sales, up 12 percent from a year earlier, and profit fell slightly to $20.7 billion. Both were slightly short of what investors expected.<\/p>\n\n\n\n

Amazon\u2019s cloud computing division saw its biggest growth in almost five years, with sales increasing 39 percent to $46 billion. Andy Jassy, Amazon\u2019s chief executive, told investors that he thought it would grow more than 40 percent a year through 2028.<\/p>\n\n\n\n

Its core retail business in North America grew 6 percent. Investors expected only modest growth because the company\u2019s popular annual Prime Day deal event was not in the third quarter for most large countries, as it was last year. The growth of Amazon\u2019s lucrative advertising business fell well short of expectations.<\/p>\n\n\n\n

The company\u2019s capital expenditures surpassed $75 billion, far more than doubling what it spent a year earlier.<\/p>\n\n\n\n

The business created $168.3 billion in cash over the past year, up 29 percent. But after investments in data centers and other facilities, Amazon\u2019s free cash flow fell to negative $42.4 billion, which it said primarily reflected its investments in A.I.<\/p>\n\n\n\n

Mr. Jassy said Amazon was installing an A.I. chip about every 14 seconds, and still, \u201calmost as fast as we installed capacity, customers are gobbling it up.\u201d<\/p>\n\n\n\n

On Wednesday, Alphabet, Google\u2019s parent company, disclosed that for the second quarter in a row, it had negative free cash flow because of its spending, even though its cloud computing business more than doubled in sales.<\/p>\n\n\n\n

But its search business, the source of so much of its free cash, underperformed, underscoring investor worries that A.I. chatbots could erode its core advertising business. Google\u2019s capital expenses more than doubled to $51 billion. It also signaled it could have more than $1 trillion in future commitments on leases and other obligations.<\/p>\n\n\n\n

Last week, for the first time since soon after Meta went public in 2012, the company told investors that its free cash flow was negative as well. It also slightly increased what it had told investors it would spend on capital expenses, and disclosed more than $800 billion in additional future leases and other commitments.<\/p>\n\n\n\n

Mark Zuckerberg, Meta\u2019s chief executive, told investors that making the most of its investments would be essential to expanding the early success of Muse, its personal A.I. agent, into a huge, profitable business.<\/p>\n\n\n\n

\u201cWe want to make sure that we\u2019ve built enough compute to be able to serve what we think is going to be one billion-plus people,\u201d he said.<\/p>\n\n\n\n

A number of the companies are issuing new stock, selling bonds and taking out loans to support their spending. On Monday, Meta said it would raise up to $95 billion from selling stock to fund its A.I. ambitions. That same day, SpaceX said it had secured $40 billion in loans to secure specialized A.I. chips.<\/p>\n\n\n\n

Microsoft showed growth in its cloud and A.I. business while keeping costs in check. The company said that it would have positive free cash flow at least through next summer, and that if it needed to tap additional resources to raise cash, it would.<\/p>\n\n\n\n

\u201cWe have lots of options to be able to tap the finance markets when they make sense and they\u2019re attractive,\u201d Amy Hood, the company\u2019s finance chief, said.<\/p>\n\n\n\n

Microsoft\u2019s revenue for the quarter was $92.3 billion, up 19 percent, and profit grew 32 percent to $36.6 billion. Sales of Azure, its main cloud computing and A.I. offering, grew 48 percent, and Microsoft told investors that it would grow even more in the current quarter.<\/p>\n\n\n\n

Its capital spending grew only 30 percent, to $45.2 billion \u2014 less than the $50 billion Microsoft previously said to expect. That reduction was due at least in part to the fact that some of Microsoft\u2019s suppliers were running behind schedule. It said it was still able to sell more computing power because it was using the resources it did have more efficiently.<\/p>\n\n\n\n

(The New York Times has sued OpenAI and Microsoft, claiming copyright infringement of news content related to A.I. systems. The two companies have denied those claims.)<\/p>\n\n\n\n

On Thursday, Microsoft said it would raise $25 billion by issuing its first new bonds in almost a decade. While its stock price was up Wednesday in late trading, its shares declined slightly on Thursday.<\/p>\n\n\n\n

Tech companies are \u201cin this existential play for market share,\u201d said Will Sommer, a tech market economist at the research firm Gartner. \u201cThey\u2019re willing to take losses to be the dominant provider of this market that we think will be worth trillions of dollars.\u201d<\/p>\n\n\n\n