Google, Microsoft, Meta, and Amazon are collectively planning $725B in capital expenditure for 2026, up 77% from last year's $410B, according to Q1 earnings guidance. Alphabet (Google) set guidance at $175–$185B; Amazon at $200B; Microsoft at $190B; and Meta at $115–$135B. These outlays are consuming an unprecedented share of cash generation: Bank of America and PIMCO estimate that 94% of operating cash flow across hyperscalers now flows to capex, up from 40% in 2023.
The structural consequence is the collapse of shareholder capital returns. Meta faces projected free cash flow declines of up to 90%, forcing a dramatic pull-back in stock buybacks that had been a hallmark of Big Tech financial engineering. Google and Meta have already begun scaling back buybacks; Amazon, which stopped repurchasing in 2022 and never paid dividends, faces negative free cash flow and is in talks to invest tens of billions in OpenAI. As a result, companies are turning to debt markets: the Big Five issued $108B in bonds in 2025 alone, with JPMorgan projecting $1.5T in tech debt issuance over coming years.
For infrastructure investors: the buyback era—which suppressed equity supply and propped up valuations for a decade—is ending. Hyperscalers must choose between dividends/buybacks and debt issuance to fund infrastructure. This represents a structural shift in how capital flows through Big Tech and a re-pricing of 'free' equity returns that have anchored the bull market. Operators building inference at scale should monitor whether actual revenue from AI services ($25B today, ~4% of capex spend) sustains the buildout.