Based on reporting from technology.org, Alphabet posted a negative cash flow of $9.1 billion during the third quarter of 2026, driven by property and equipment expenditures of $51.4 billion—more than double what it spent in the same period a year earlier.
The quarter the cash ran out
Historically throughout the artificial intelligence surge, the top four US platform and cloud providers funded their data center investments using earnings from their established operations.
Search ads, social media ads, online retail, and software licences threw off enough cash to cover the bills, with plenty left over for buybacks.
The third quarter of 2026 broke that pattern. Alphabet’s earnings release for the September quarter showed $42.3 billion of operating cash flow against $51.4 billion of purchases of property and equipment, resulting in negative free cash flow of $9.1 billion in a single quarter for a company that earned $26.5 billion of net income over the same three months.
Meta followed suit. Its capital spending, including principal payments on finance leases, reached $34.91 billion, leaving its quarterly free cash flow at minus $2.12 billion, according to Meta’s third-quarter release filed with the SEC.
Amazon reports free cash flow on a rolling 12-month basis. That figure swung to an outflow of $42.4 billion from an inflow of $14.8 billion a year earlier, technology.org reported.
Since 2025, Alphabet, Amazon and Meta have collectively raised approximately $286 billion through bond sales: • Alphabet: $118 billion • Amazon: $113 billion • Meta: $55 billion The AI wave is being funded heavily by debt issuance. Microsoft had largely stayed out of that… pic.twitter.com/zH4TV2C4Go
Free cash flow represents the money left after a company pays to run its business and build its assets. A negative number does not mean these firms are in trouble. It means the build-out now costs more than the businesses generate, requiring the gap to be filled from savings, new shares, or new debt.
Spending plans keep rising
None of the major cloud providers is slowing down infrastructure deployment. During its October earnings call, Alphabet maintained its projected 2026 capital expenditures within the $195 billion to $205 billion band. Chief financial officer Anat Ashkenazi said spending would “increase significantly in 2027”, with details promised for the upcoming call.
Amazon stated in its release that it still expects about $220 billion of cash capital expenditure this year. Amazon chief executive Andy Jassy told analysts that Amazon Web Services could grow “north of 40% in each of 2027 and in 2028”, though that remains a forecast rather than a recorded result.
Meta narrowed its 2026 capital spending range to $135 billion to $145 billion and stated it expects to keep investing aggressively in its core business and artificial intelligence next year. For the quarter ending in September, Microsoft—whose fiscal calendar spans July through June—reported $39.4 billion in property and equipment additions, which was roughly double the figure from the same time last year.
Alphabet, Meta and Amazon’s combined free cash flow decreased from $36.4B to −$44.6B in 1 year. The main driver was CapEx, which more than doubled from a year earlier. To help fund that spending, they’ve raised ~$287B in new debt and stock so far this year. pic.twitter.com/4HRhQNHVxN
Alphabet has also disclosed $924 billion of future purchase commitments. These are maximum contractual amounts, and the company notes that the final bill may be lower due to variable pricing and volume flexibility.
| Company | Capital Spending (Latest Quarter) | Free Cash Flow | 2026 Spending Guidance | Cash and Securities vs Long-Term Debt |
|---|---|---|---|---|
| Alphabet | $51.4bn purchases of property and equipment | Minus $9.1bn (quarter) | $195bn to $205bn; “significant” rise in 2027 | $265.1bn vs $125.1bn |
| Amazon | $77.3bn gross purchases of property and equipment | Minus $42.4bn (trailing 12 months) | About $220bn | $114.2bn vs $173.1bn |
| Meta | $34.9bn including finance lease principal | Minus $2.12bn (quarter) | $135bn to $145bn; aggressive investment in 2027 | $82.45bn vs $80.9bn |
Where the money comes from now
An FTSE Russell analysis published on October 29 revealed that across Amazon, Alphabet, Meta, Microsoft, and Oracle, fixed-rate, investment-grade, index-eligible debt issuance reached $218.1 billion in 2026 as of early October, largely driven by AI-related borrowing.
Within FTSE Russell’s US corporate investment-grade index, the collective weighting of these five corporations climbed from 2.7% to 4.7% over a two-year span. Alphabet alone sold $20 billion of dollar bonds in February, and a prospectus filed on June 1 set out an $80 billion equity raise, including $30 billion of underwritten common and mandatory convertible preferred stock, a $40 billion at-the-market share sales programme, and a $10 billion private placement with Berkshire Hathaway.
Alternative financing structures also play a role. Meta transferred its premier Louisiana data center development—the Hyperion campus—into a $27 billion joint venture during October 2025, with Blue Owl-managed funds taking an 80% stake.
The Bank for International Settlements studied such structures in its March Quarterly Review, describing them as shadow borrowing. The BIS warned that these arrangements tie hyperscalers more closely to private credit funds and insurers, and that guarantees could be called upon if data centre demand weakens.
What lenders are charging
Bond investors have continued buying, but at a higher price. FTSE Russell figures put the average spread on hyperscaler bonds at 119 basis points over Treasuries in October, against 86 basis points for the broader US corporate index. Since December 2025, the hyperscaler spread has widened by about 31 points while the broader index barely moved.
As of August’s close, Oracle’s debt traded roughly 100 basis points higher than its industry counterparts, while its five-year credit default swaps reached 331 basis points on October 21—dwarfing the 80 basis points required for Amazon and 56 basis points for Microsoft. Oracle carries a BBB- designation, marking the bare minimum for investment-grade status.
Equity investors have shown less patience with the expanding expenditure. The Nasdaq Composite fell 3.2% on November 5, leaving it about 10% below its October 6 record close as the slide put the index on course for its second correction of the year, Reuters reported.
