Big Tech’s AI spending is catching up with its cash flow
The four largest US technology companies are on course to spend close to $700bn on artificial intelligence infrastructure this year, and the cost is starting to show up in the one figure that is hard to dress up: free cash flow.
An analysis by Reuters, found that combined capital spending across the major cloud operators is set to overtake the cash their core businesses generate.
Wall Street’s consensus for this year’s AI capex has climbed from roughly $485bn in January to about $730bn by July, on the figures Reuters compiled.
The sharpest early warning came from Amazon, whose free cash flow fell to $1.2bn on a trailing 12-month basis in the first quarter, down from about $26bn a year earlier, even as operating cash flow rose 30% to $148.5bn.
The mechanics are straightforward. Capital spending is growing far faster than the money coming in.
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