The Spender's Dilemma

Big Tech's AI spending spree is facing its biggest market test yet. Alphabet's earnings showed that the real issue is no longer revenue growth—it's how much cash companies are burning to stay competitive in the AI race. With free cash flow under pressure and borrowing costs climbing, investors are starting to question whether even the world's largest technology companies can keep financing ever-bigger AI investments without weighing on valuations at a time interest rate expectations, rising government and AI dent lift long term borrowing costs. Next week, Microsoft, Meta, Amazon and Apple report earnings, but the real focus won't be profits—it will be spending. How much more will they invest? Can they still generate enough cash to fund the AI buildout? And what does it mean for chipmakers, data centres and the broader AI supply chain?