Amazon, Meta Platforms, and Microsoft have seen substantial growth due to the AI revolution, driving up capital expenditures to enhance AI infrastructure. These companies have relied on strong free cash flow to finance this growth, reflecting their dominance in cloud computing and social media. However, projections indicate that AI-related capital expenditures could reach $2 trillion between 2025 and 2028, with over $1 trillion potentially needing new debt financing. This raises concerns about the sustainability of their self-funded growth model as AI spending accelerates.
The artificial intelligence (AI) revolution has catapulted Amazon, Meta Platforms, and Microsoft into a spending frenzy, with capital expenditures soaring to fuel the data centers and computing power needed for AI innovation.
Up until now, these tech giants have largely financed this growth through robust free cash flow (FCF), a testament to their dominant positions in cloud computing, social media, and enterprise software.
An alarming projection estimates that AI-related capital expenditures from 2025 to 2028 will require $2 trillion, with over $1 trillion of that financed through new debt.
Amazon's AWS has generated billions in FCF to support its AI infrastructure, while Meta has leveraged its advertising revenue to fund projects like LLaMA.
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