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Investors turn wary of Big Tech's $740B+ AI capex as Nasdaq falls 2.9%

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Investors turn wary of Big Tech's $740B+ AI capex as Nasdaq falls 2.9%

TechCrunch reports that investor sentiment on AI infrastructure spending is turning just as Big Tech doubles down. Over the past two weeks, Alphabet, Amazon, Meta and Microsoft have outlined plans to spend more than $740 billion in capital expenditures this year, which Wall Street is reading as AI infrastructure spending, including data centers and chips. Earlier in the AI boom, investors largely rewarded such outlays as a sign of confidence in the technology. As the fourth quarter begins, the article says that enthusiasm seems to be giving way to concerns about negative free cash flow (spending more cash than a company brings in), mounting debt, and whether the investments will ever generate enough returns.

The anxiety spilled across the market on Friday. The Nasdaq fell 2.9%. Nvidia dropped 4%, Broadcom more than 5% and Qualcomm 11%. Alphabet, which plummeted 12% on Thursday, its worst day on record and a loss of $500 billion in market value, fell again.

Alphabet is the clearest example. It reported negative free cash flow of $9.1 billion in the third quarter, its second consecutive quarter in the red, while quarterly capex grew to $51.4 billion. It expects to spend up to $205 billion this year and expects spending to keep rising in 2027. Meanwhile the success of AI Mode, Google's AI-powered chatbot feature built into Search, is eating into the company's money-maker: Search advertising, roughly half of Google's revenue, saw growth slow to 12%, its weakest pace in five quarters. TechCrunch describes Google as walking a tightrope, spending billions on AI technology that could undermine the search business that pays for it.

Amazon reported negative free cash flow of $42.4 billion over the past 12 months, against $14.8 billion positive the year before, and expects to spend $220 billion in capex this year. AWS revenue grew 39%, yet Amazon's stock fell 7% after Thursday's earnings.

Meta had negative free cash flow of $2.1 billion in the third quarter as capex outpaced operating cash, and it is guiding to as much as $145 billion in capex this year. The article calls Muse, Meta's new free personal AI agent, a bit of a money pit, quoting CEO Mark Zuckerberg that it is "very compute-intensive to run". Ad revenue grew 26%, but Meta's stock still took a 10% hit last week.

Microsoft was the only exception on free cash flow: $18.6 billion positive in its latest quarter. Its capex was $45.2 billion, below the $50 billion it had projected. Microsoft said this was not an intentional pullback from AI spending and blamed delays in capacity from third-party providers. As a result, shares of smaller companies that rent out AI computing power sank.

The money is not coming only from profits. According to S&P Global Market Intelligence, Microsoft, Alphabet, Amazon, Meta and Oracle raised a combined $326 billion in debt in 2026, triple the amount raised last year; the article adds that stock sales are also part of the funding.

Demand for AI compute remains strong, and Google, Amazon and Microsoft all saw gains in their cloud businesses. The worry is the cost of meeting that demand. TechCrunch says the muddied waters could complicate Anthropic's highly anticipated IPO. The company filed to go public earlier this week, and its growth depends on securing huge amounts of compute. The Financial Times reported Friday that Blackstone has warned investors Anthropic might not qualify for an investment-grade rating after the IPO, which could leave it more reliant on hyperscalers and third parties to fund its infrastructure plans.

Key facts

  • Alphabet, Amazon, Meta and Microsoft have outlined capex plans of more than $740 billion this year, which Wall Street reads as AI infrastructure spending.
  • The Nasdaq fell 2.9% on Friday; Nvidia lost 4%, Broadcom more than 5%, Qualcomm 11%. Alphabet fell 12% on Thursday, its worst day on record, erasing $500 billion in market value.
  • Free cash flow turned negative at Alphabet (-$9.1 billion in Q3), Amazon (-$42.4 billion over 12 months) and Meta (-$2.1 billion in Q3); Microsoft stayed positive at $18.6 billion.
  • Microsoft, Alphabet, Amazon, Meta and Oracle raised a combined $326 billion in debt in 2026, triple last year's amount, per S&P Global Market Intelligence.
  • Cloud demand is still strong, but the selloff could complicate Anthropic's IPO; the Financial Times reports Blackstone warned it may miss an investment-grade rating.

Why it matters

The article marks a change in how markets treat AI spending. Earlier in the boom, big outlays were rewarded as a sign of confidence. Now, with the four companies planning more than $740 billion in capex this year, investors are weighing negative free cash flow, rising debt and whether returns will materialise. The Google example sharpens the point: AI Mode is succeeding, and Search advertising growth slowed to 12%, its weakest in five quarters, so the company is funding technology that could undercut its main earner.

Who it affects

Shareholders of the four big spenders, and of chipmakers: Nvidia, Broadcom and Qualcomm all fell on Friday. Smaller companies that rent out AI computing power are exposed too, since their shares sank after Microsoft's capex came in below plan. Anthropic is named as a company whose IPO could be complicated, because its growth depends on securing large amounts of compute.

How to use it

This is a market read, not a product or tool. Its practical value is as a checklist of what the article says investors are now watching: free cash flow (cash in versus cash spent), debt raised to fund buildouts, capex guidance for this year and next (Alphabet expects spending to keep rising in 2027), and whether cloud growth such as AWS at 39% justifies the outlay.

How solid is it

The figures are specific and tied to company reports, and the debt total is attributed to S&P Global Market Intelligence. The link between the selloff and AI spending is TechCrunch's interpretation of investor mood. The $740 billion figure is also labelled as Wall Street's reading of capex as AI infrastructure spending. The Blackstone warning is relayed through the Financial Times, not reported first-hand.

Risks and caveats

The $740 billion covers four companies only; the $326 billion debt figure covers five, including Oracle. The article does not say how much of each company's capex is specifically for AI. Blackstone's warning is phrased as a possibility (Anthropic "might" miss an investment-grade rating). Cloud demand remains strong, and Microsoft says its capex shortfall was caused by third-party capacity delays, not a retreat from AI.

“But investors are getting spooked by the costs of meeting that demand.”

— TechCrunch