Big Tech companies will have to raise tens of billions of dollars to fund their skyrocketing investments in artificial intelligence this year, as capital spending outpaces cash flows even among some of the world’s most profitable companies.
Google’s parent Alphabet, Amazon and Meta all surprised investors with the scale of their AI spending plans over the past two weeks. A total of more than $660bn is set to be ploughed into chips and data centres this year as they race to dominate what many in Silicon Valley believe will be the biggest wave of innovation since the internet.
The unprecedented infrastructure build-out will force Big Tech executives to choose between stemming capital returns to shareholders, raiding their cash reserves or tapping the bond and equity markets more than previously planned, analysts say.