AI Spending Growth and Future Cash Flow Projections
Hyperscalers are projected to increase their capital expenditures (capex) on artificial intelligence (AI) infrastructure to $1.3 trillion in 2027, up from an estimated $870 billion this year. This forecast comes from S&P Global, which indicates that only Microsoft is expected to have positive free cash flow (FCF) next year among the six major companies analyzed, which include Alphabet, Amazon, Meta Platforms, Oracle, and SpaceX. The group collectively spent $470 billion on capex in 2025.
Despite robust AI-related revenue growth, these expenditures have started to strain the balance sheets of these tech giants, with all but Microsoft projected to experience negative FCF by 2027. For instance, Alphabet is expected to incur a loss of $82.7 billion in FCF against a capex of $357 billion, while Meta Platforms may see a loss of $3.5 billion with $164 billion in projected capex.
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