STOCKS | Tech Giants Bet Trillions on AI Infrastructure, Relying on Continued Growth in Legacy Businesses

Major technology companies are making trillion-dollar bets on AI infrastructure, relying on continued growth in advertising, enterprise software and e-commerce to fund the investment as they await future returns. According to Sina Finance, the latest earnings reports showed pressure on core businesses and cash flow. Meta reported negative free cash flow of $2.12 billion, Amazon’s net cash outflow widened to $42.4 billion, and Alphabet’s reached $9.07 billion. Microsoft was the only one of the five hyperscale cloud providers to maintain positive free cash flow, though its cash generation fell 27% to $18.63 billion for a second consecutive quarter. Amazon expects capital expenditures of $220 billion this year, while analysts forecast more than $280 billion next year. Meta said its capital expenditures could reach $145 billion this year, and analysts expect them to exceed $210 billion in 2027. Microsoft said it would continue issuing bonds to expand its AI infrastructure investment. Alphabet recorded its largest-ever one-day share decline on Thursday, while Amazon shares fell in after-hours trading following its earnings report.