After the big AI investments: Are Amazon, Google, and Meta going to run out of cash flow?

As the arms race for AI infrastructure construction enters the "deep water zone," a troubling turning point has emerged for investors: to support the demand for AI computing power, Amazon, Google, and Meta are facing the risk of depleting or even overdrawing their free cash flow.

According to a research report released by JP Morgan on February 5, 2026, the total capital expenditure of the four major cloud giants in the United States—Amazon, Google, Meta, and Microsoft—is expected to reach $645 billion in 2026, a year-on-year surge of 56%, with new expenditures reaching an astonishing $230 billion.

For investors, 2026 may be a year to closely monitor the balance sheets of tech giants.

Google's 97% Growth Rate and Amazon's "Cash Deficit"

In this infrastructure frenzy, Google's investment is very aggressive.

In 2026, Google's capital expenditure guidance has been raised to $175 billion to $185 billion, with a year-on-year growth rate of 97%, as its funds are pouring into servers and technological infrastructure.

If Google is merely "spending wildly," then Amazon can be said to be "overdrawing the future."

In 2026, Amazon's capital expenditure guidance is about $200 billion (a year-on-year increase of 52%). However, the core issue is that the cash Amazon earns can no longer cover its expenditures—according to S&P Global market analysts, Amazon's operating cash flow (OCF) in 2026 is expected to be around $178 billion.

This means that Amazon's capital expenditure will exceed its operating cash flow, leading to a substantial cash net outflow (Burn Cash). Additionally, according to The Information, Amazon is also negotiating to invest hundreds of billions of dollars in OpenAI, which will further deplete its cash reserves.

Meta's situation is equally grim. Its capital expenditure in 2026 is expected to grow by 75% to between $115 billion and $135 billion. Although it is not directly "running a deficit" like Amazon, this massive expenditure will nearly "wipe out" Meta's free cash flow, making its once comfortable financial situation quite strained.

Shareholder Returns Under Pressure, Microsoft May Be the "Exception"

As the reservoir of cash flow dries up, shareholder return plans are facing pressure for adjustment. In recent years, tech giants have strongly supported their stock prices through large-scale stock buybacks. However, this engine may stall in 2026:

• Reduced Buybacks: Last year, Meta spent $26 billion on stock buybacks, but as free cash flow is expected to shrink significantly this year, its buyback efforts may be forced to cut back.

• Dividend Pressure: Google and Meta paid approximately $10 billion and $5 billion in dividends, respectively, in the last fiscal year. They should still be able to afford these dividends this year, but this will further squeeze their already tight cash flow.

Amazon will not face the same issues, as it has not conducted any stock buybacks since 2022 and has never paid dividends. Given the cash deficit in 2026, the likelihood of it restarting buybacks is minimal.

In the face of funding gaps, the giants are beginning to leverage the flexibility of their balance sheets:

• Google: Despite soaring expenditures, Google is currently in a "zero net debt" position (cash of $127 billion > debt of $47 billion). S&P has noted that even if Google increases its net debt by $200 billion, it would not trigger a downgrade of its AA+ credit rating.

• Amazon: Despite facing cash flow deficits, Amazon still held $123 billion in cash at the end of last year and issued $15 billion in bonds last November. Recently, it has submitted a registration statement to the SEC to prepare for further large-scale bond issuance.

Amidst the "burning money" narrative, Microsoft has demonstrated unique financial resilience.

Although Microsoft's capital expenditures for the fiscal year 2026 (ending in June) are expected to exceed $103 billion (an increase of over 60%), analysts predict it will still generate about $66 billion in free cash flow, sufficient to cover its massive expenditures.

However, despite Microsoft's likely generation of substantial free cash flow, it faces constraints that other companies do not—namely, higher dividend expenditure commitments. Microsoft paid out $24 billion in dividends last fiscal year and has already increased its dividend by 10% this year.

Conclusion: Beware of the "Oracle Trap"

For investors, 2026 will be a year to closely monitor balance sheets.

Oracle provides a dangerous warning— to fund data center construction, Oracle's net debt has soared to $88 billion, more than twice its EBITDA. This excessive leveraging of the balance sheet has led to market punishment, with its stock price dropping 27% this year.

Now, a $645 billion bill is on the table.

As Silicon Valley giants attempt to use today's cash flow, or even future debt, to buy a ticket to the AI era, if this gamble does not translate into tangible revenue growth in the future, the cash flow crisis of 2026 may just be the prologue to a valuation reconstruction