Mega-cap tech’s AI infrastructure race has shifted from balance-sheet fortress to capital-intensive buildout. Amazon, Alphabet, Microsoft, and Meta are projected to deploy a combined $750 billion in capex this year—more than 80% above 2025 levels—with broader tech capex expected near $920 billion. Goldman Sachs flags the capex-to-cash-flow ratio at the highest level since the dot-com era.
Several hyperscalers are already depleting multi-year cash reserves. Amazon is widely expected to post negative free cash flow despite its scale. To bridge the gap, Nvidia, Oracle, Amazon, Alphabet, and Meta are each raising tens of billions in the debt markets. SpaceX is preparing a $20 billion+ bond deal; OpenAI’s CFO has cited debt-market access as a key IPO motivation.
The result is a structural increase in interest-rate sensitivity. Tech investors who previously ignored the Fed and Treasury market must now track inflation prints, 10-year yields, and central-bank signals with the same urgency as industrial or REIT investors. Recent comments from new Fed Chair Kevin Warsh and the subsequent equity sell-off and yield rise to ~4.45% illustrate the new transmission channel. While Nvidia retains robust cash generation, the sector as a whole is learning that sustained AI leadership now requires continuous access to both debt and equity markets at acceptable costs.
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