Tech Giants Face Cash Flow Pressure Amid Colossal AI Costs

Benzinga

Microsoft, Alphabet, and Amazon have poured more than $600 billion into AI since 2023, draining cash reserves and reshaping their financial profiles. Heavy AI investment is driving massive asset expansion, new debt issuance across Big Tech, and rising investor concern over long-term returns.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:02Microsoft, Alphabet, and Amazon have spent more than $600 billion on AI since 2023,

00:08a surge that is weakening cash balances, reducing free cash flow, and reshaping their business

00:13models. Their cumulative net income is set to surpass $750 billion between 2023 and 2025,

00:21but the cash drain is growing as assets expand with AI infrastructure, according to the Wall

00:26Street Journal. Microsoft's cash and short-term investments fell to about 16% of assets,

00:32down from around 43% in 2020, while Alphabet and Amazon also reported smaller relative cash

00:38positions. Meta doubled its debt with a $30 billion bond in October, and Oracle sold $18 billion in

00:44bonds after its cloud computing deal with OpenAI. Investors reacted as Amazon stock fell about 5%

00:51last week, and Google fell about 2.5%, reflecting concerns that heavy AI spending is altering how

00:57these companies generate returns. For all things money, visit Benzinga.com.

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