Big Tech AI Spending Tops $3 Trillion as Buybacks Nearly Vanish
Big Tech AI spending has reached the point where the five biggest US cloud and software giants are spending more on data centers than their businesses bring in. Microsoft, Alphabet, Amazon, Meta and Oracle poured $556.9 billion into capital spending in the first nine months of 2026, and share buybacks have nearly disappeared as a result.
The numbers come from a Reuters analysis of LSEG data and company filings. Operating cash flow rose 29% to a record $542.9 billion, but capital spending doubled and topped it for the first time in data going back to 2011. That left the group with a combined free cash flow deficit of $14 billion, compared with a $143.5 billion surplus a year earlier.
Big Tech AI Spending Squeezes Shareholder Returns
The five companies returned just 9.3% of the cash they generated through dividends and buybacks, down from 27.4% a year ago and the lowest share in at least 15 years. Buybacks fell 83% to $13.6 billion from $81.8 billion. Dividends, which investors treat as a firm promise, still rose to $37 billion.
Alphabet and Meta have not repurchased a single share in 2026. Microsoft accounts for nearly all of the remaining buybacks, and even it cut repurchases to $4.4 billion in the September quarter.
With free cash flow negative, those payouts are effectively being funded from cash reserves, debt and share sales. Amazon spent $75.9 billion on capex in the third quarter and raised $48.1 billion in long-term debt, even as AWS grew at its fastest pace in years in its latest Amazon Q3 earnings report. Alphabet raised about $29 billion in debt and $12.4 billion from share sales.
More Than $3 Trillion Already Committed
The spending is not slowing down. According to Bloomberg, the same five companies have disclosed more than $3 trillion in commitments for data center leases, buildings, energy and equipment. Some of those obligations run for years or even decades.
Amazon still expects around $220 billion in capex this year, and analysts quoted by CNBC see that topping $280 billion in 2027. Meta guides for up to $145 billion this year and plans to raise $95 billion in stock to fund its AI push.
Credit markets are starting to notice. S&P recently moved its Meta credit rating outlook to negative over the same capex surge, and Microsoft has said it will turn to the bond market to keep building.
What It Means for Investors and Users
For shareholders, the deal has changed: less cash today in exchange for a bet that AI eventually earns enough to justify the bill. For everyone else, the race for chips and memory is already rippling into consumer hardware, a tension highlighted by Sam Altman’s comments on PC memory moving into data centers.
None of the five companies has given a 2027 capex forecast yet, but all of them signaled that data center spending will keep climbing.
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