Major technology companies are confronting deteriorating cash flows as artificial intelligence investments escalate sharply. Amazon has posted negative cash flow of $7.6 billion over the past 12 months, while Alphabet's cash flow has turned negative for the first time and Meta's cash generation capacity has plummeted 91% year-on-year.
Goldman Sachs projects U.S. tech giants will spend $765 billion on AI this year, potentially reaching nearly $1.2 trillion by 2027. Individual commitments are mounting: Alphabet plans $200 billion in AI-related spending for 2026 and Amazon has earmarked $200 billion, while OpenAI intends to spend $750 billion by 2030, primarily on data centres.
HSBC assigns a 37% probability to a "hyperscaler overspend" scenario affecting markets, noting that Moonshot's Kimi K3 model release and intensifying Chinese lithography competition are reshaping investor positioning. Meanwhile, Apple has raised Mac and iPad prices due to rising memory costs, with analysts expecting further iPhone price increases later this year.