Microsoft, Alphabet, Meta and Amazon reported combined AI capital expenditure of 208.7 billion dollars for the July-September quarter, up 84% from 113 billion a year earlier. Amazon led the spending at 77.3 billion dollars, followed by Alphabet at 51.4 billion, Microsoft at 45.2 billion and Meta at 34.9 billion. The four companies now target 735 billion dollars of investment for 2026, a rise of 78% on 2025.
Cash flow comes under strain
The spending has begun to erode free cash flow. Alphabet posted negative free cash flow of 9.1 billion dollars in the quarter, and Meta posted negative 2.1 billion. Microsoft still generated 18.6 billion dollars, but its free cash flow fell 27%. Amazon’s negative trailing twelve-month cash flow stood at 42.4 billion dollars.
To fund the build-out, the companies have borrowed heavily. Alphabet’s long-term debt rose to 125.1 billion dollars from 46.5 billion at the end of 2025. Amazon raised 48.1 billion dollars of debt in the quarter, and Microsoft placed a 25 billion dollar bond.
Cloud revenue keeps pace
Revenue growth across the cloud units has been strong. Google Cloud grew 103% to 30.7 billion dollars, Azure rose 48%, and AWS grew 39%. Microsoft reported a backlog of 677 billion dollars, while AWS’s backlog stood at roughly 578 billion.
CoreWeave, a specialist AI infrastructure provider, reported quarterly revenue of 3.7 billion dollars, up 168%. Its order backlog reached 132.5 billion dollars, but its adjusted net loss was 529 million dollars, and interest expense climbed to 846 million from 310 million a year earlier.
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