Alphabet, Amazon, Meta, and Microsoft plan to spend more than $740 billion on capital expenditure this year, mostly on AI data centres and chips. Investors, once supportive, are growing wary of negative free cash flow, rising debt, and uncertain returns. The Nasdaq fell 2.9% on Friday. Alphabet dropped 12% on Thursday, its worst day on record, wiping out $500 billion in market value. Amazon fell 7% and Meta 10%. Alphabet reported negative free cash flow of $9.1 billion in the third quarter, and Amazon $42.4 billion over 12 months. Meta's was negative $2.1 billion. Microsoft was the exception, with positive $18.6 billion. Microsoft, Alphabet, Amazon, Meta, and Oracle raised a combined $326 billion in debt in 2026, triple last year's amount. The strain could complicate Anthropic's planned IPO.

Big Tech shares tumbled this week as investors questioned the cost of building AI infrastructure. Google had its worst day ever, while Intel fell more than on any day since the Nixon administration. The Nasdaq is just over a percentage point from a 10% correction. Yet spending continues. AI investment has reached $1.6 trillion since 2023 and is expected to hit $1 trillion a year for about a decade, according to JPMorgan. The bond market is funding much of it. Goldman Sachs expects hyperscalers to issue about $250 billion in bonds this year and estimates $510 billion of investment-grade debt is available to them. The key question, the analysis argues, is how long lenders will keep financing the spree. Rising yields could lift borrowing costs, as CoreWeave's bonds, which surged to 15%, show.

Microsoft is raising $25 billion in debt, and its shares fell 1.54% to $521.96 at 11:15 ET on October 30. The offering, announced October 29, includes $23 billion in fixed-rate notes and $2 billion in floating-rate notes. Closing is expected November 4. Proceeds can fund capital spending, acquisitions, and refinancing. The fixed-rate coupons imply annual interest of about $1.284 billion, before floating-rate costs and issuance adjustments. The company has the scale to carry that cost. September-quarter revenue reached $92.3 billion, while cloud revenue rose 30% to $63.9 billion. The test for investors is whether new capacity earns enough cash to cover both the investment and its financing.