Google, Amazon, Microsoft and Meta’s capital investment spree tops $1tn

Big four hyper scalers have been expanding their outlay since 2023 with no end in sight

Financial Times Europe1 Aug 2026RYAN MCMORROW, RAFE ROSNER-UDDIN AND HANNAH MURPHY

The four big hyper scalers have ploughed more than $1tn into cap ital invest mentssince their race to dom in ate AI began three and a half years ago, as Amer ica’slargest tech groups bet their future on the tech no logy.

Com bined cap ital spend ing by Google, Amazon, Microsoft and Meta from the begin -ning of the AI boom in 2023 to the end of June hit $1.1tn, accord ing to earn ingsreports from the four com pan ies in the past two weeks.

The massive expendit ure is a mark of both the scale of their AI ambi tions and thespeed with which the US tech giants have turned from cap ital-light busi nesses intohuge investors in phys ical infra struc ture.

“There is basic ally no end in sight for the growth in capex,” said Rishi Jaluria, anRBC Cap ital ana lyst. “Investors need these com pan ies to toe the tight line betweeninvest ing in AI and not com prom ising the things that have made them suc cess ful.”

The four groups com bined plan to spend $745bn on capex, mainly data centres,advanced chips and the power to run them this year.

The suc cess of this bet remains partly con tin gent on the abil ity of start-ups OpenAIand Anthropic to keep rais ing funds to meet vast, mul ti year com mit ments to buycom put ing power, as both AI labs plot their pub lic list ings.

The rush of invest ment has strained sup ply chains and driven up costs, caus ing ashort age of memory chips, which hurt Apple, even as the iPhone maker sits out theAI race. Its warn ings of lower sales and mar gins due to cost increases sent the stockdown 6.3 per cent on Thursday.But Big Tech’s fin an cial res ults showed these invest ments are begin ning to trans lateinto accel er at ing rev enue growth, par tic u larly in cloud com put ing. Google, Amazonand Microsoft all repor ted rising growth in their cloud units, selling com put ingpower to every one from OpenAI and Anthropic to cor por a tions embra cing AI. Thefig ures boos ted Amazon and Microsoft stocks.

Meta, which does not have a cloud busi ness, said AI was help ing it to tar get advert -ising, with total rev enue up 28 per cent year on year to $61bn in the quarter. Chiefexec ut ive Mark Zuck er berg hin ted at a leap into leas ing out data centre space,telling investors Meta was field ing “a large num ber of offers” to rent out its com -pute “at a mean ing ful premium over what we paid”.

He added, however, that “there will con tinue to be a sig ni fic antly higher mar gin onselling intel li gence rather than selling com pute dir ectly”.

Dec Mul lar key, man aging dir ector at asset man age mentfirm SLC Man age ment, saidthe lack of a clear plan from Meta to rent out com put ing power was partly respons -ible for its 8 per cent share price fall on Thursday. “They are a bit all over theplace,” he said.

“For investors it’s no longer growth at any cost, they want to see the spend ing flow -ing through to res ults, like at the big three,” he said, refer ring to Google, Microsoftand Amazon.

Google’s cloud busi ness added $11bn of rev enue on last year’s sales, but investorsstill sold off shares as it repor ted its first quarter burn ing cash since going pub licmore than two dec ades ago, post ing neg at ive $6bn of free cash flow for the period.

Google also dis closed huge increases in its future fin an cial com mit ment linked to AIinvest ments, which bal looned by about $500bn from three months before. The bulkof the new con tracts involve long-term pur chase com mit ments for tech nical infra -struc ture, as well as energy for data centres.

Meta signed $233bn of new com mit ments in the quarter. The addi tions include$96bn in leases for data centres and net work infra struc ture that will move on to itsbal ance sheet as they come into use, $112bn in pur chase com mit ments, mostly forthird-party cloud capa city serv ers, and other infra struc ture, as well as $25bn innew debt.

The group then added another $68bn in data centre leases in July.

Microsoft signed more than $130bn of new data centre leases in the second quarter.Together the three com pan ies agreed close to $900bn of new AIr e lated oblig a tionsin the three-month period, bind ing their bal ance sheets to the AI race for years tocome. Amazon has yet to post these dis clos ures. Sev eral top exec ut ives acknow -ledged that the out lay on AI would con tinue to sap free cash flow in com ing quar -ters. The free cash flow met ric is closely watched as a meas ure of the cash com pan -ies have left to ser vice debt or return to share hold ers after cov er ing their oper at ingcosts and cap ital spend ing.

The four groups’ com bined free cash flows fell to a dec ade low of $7bn dur ing theperiod, with only Microsoft and Meta bring ing in more than they spent.

Amazon chief Andy Jassy told investors that the group would have to absorb freecash flow pres sures for some time as it raced to build “many data centres sim ul tan -eously” with a two-year lag from com mis sion ing a facil ity to installing serv ers thatenabled it to charge cus tom ers. “In the short term . . . we’ll spend a lot of capex andencounter free cash flow head winds until these data centres come online,” he said.

The sig ni fic ant lag between Big Tech’s massive upfront data centre invest ment andany asso ci ated rev enue means that investors will have to be pre pared to wait yearsfor mean ing ful returns on their invest ment. “Investors are being forced to rethinktheir own timelines,” Jaluria at RBC added.