Big Tech's quarterly capex hit US$202bn, more than its operations brought in

01The line: eleven quarters, four companies

Amazon spent US$77.3bn in the quarter, up from US$35.1bn a year earlier. Alphabet spent US$51.4bn (US$24.0bn), Microsoft US$39.4bn (US$19.4bn) and Meta US$33.9bn (US$18.8bn).¹⁰ Together, the first nine months of 2026 came to US$496.7bn, already a third more than the US$376.1bn they spent in the whole of 2025.¹⁰

The chart counts cash paid, which leaves out assets taken on finance leases. On their own definitions, Microsoft reported US$45.2bn including US$7.4bn of finance leases, and Meta US$34.91bn including lease principal.¹⁸ Oracle, whose quarters end a month earlier, is on the same line: US$28.5bn in the quarter to 31 August, against US$8.5bn a year before and US$2.3bn two years before.⁹¹⁰

02What drives it, and the argument over it

What the money buys. Amy Hood, Microsoft’s finance chief, said on 28 October that “roughly three quarters of our capex was for short-lived assets, primarily CPUs and GPUs, including higher memory and storage costs”.¹ Alphabet’s Anat Ashkenazi put about 65% of its technical-infrastructure spending in servers and networking, with useful lives of six years, and the rest in data centres.⁴

What they say comes next. Alphabet’s 2026 range of US$195–205bn “remain unchanged”, and it expects capex “to increase significantly in 2027”.⁴ The range was US$180–190bn after the April call and was raised in July, W.Media reported.⁵⁶ Amazon “continue[s] to expect 2026 cash capital expenditures to be approximately $220 billion”.⁷ Microsoft expects calendar-2026 spending of about US$170bn, down from about US$175bn in July “due to the 3P capacity delays”, meaning third-party data-centre deliveries that slipped.¹² Meta narrowed its range to US$135–145bn from US$130–145bn.⁸ Oracle’s release gives no full-year figure.⁹

Company by company, the September quarter split. Microsoft had US$18.6bn of free cash flow left.¹ Alphabet was US$9.1bn short, its second negative quarter, and Meta US$2.1bn short on its own measure.³⁸ Amazon’s free cash flow over twelve months was minus US$42.4bn.⁷ Oracle’s quarter was about US$5bn short, and US$11.4bn of its US$23.1bn operating cash flow was customers paying in advance for capacity to be built.⁹ How the gap is being paid for is a separate story.

Too much, or not enough? The Bank for International Settlements wrote on 28 June that “a wave of optimism about AI spurred a surge in capital expenditure on AI infrastructure” and that “animal spirits about AI lifted stock valuations”.¹¹ The Bank of England’s Financial Policy Committee wrote on 7 July that “this pace of investment is unprecedented historically”, that AI valuations “on some metrics” have “become more stretched”, and that the earnings forecasts behind them “are highly uncertain”.¹²

The companies answer with contracts and returns. Microsoft’s commercial remaining performance obligation is US$677bn, up 73%; Oracle’s is US$664bn.¹⁹ Ashkenazi said Alphabet expects “an attractive ROIC that remains meaningfully above our cost of capital”.⁴ Hood said, “We feel good that the return on every dollar of CapEx we’re spending, we’re confident in that”, and in July that if demand changes, “you just slow down” the chip spending, which has short lead times.¹² Andy Jassy projects AWS revenue growth “of over 40% both in 2027 and in 2028”.⁷ We report both sides; we take neither.

03What it means for a buyer of cloud and AI services

Capacity is short, by the sellers’ own account. Alphabet began renting third-party compute at the end of the quarter “given the supply-constraint environment”; Oracle says AI demand “continues to grow faster than supply”; Microsoft said third-party capacity it expected in the quarter arrived late.⁴⁹¹

Components cost more. Microsoft’s spending includes “higher component pricing” and higher memory and storage costs, and Amazon lists supply volatility “including for memory chips” among the risks to its guidance.²¹⁷

The largest buyers commit early. Microsoft’s backlog has a weighted average duration of 2.3 years, and Oracle is taking prepayments for capacity it has not yet built.¹⁹