Big Tech AI Spending May Require Cash Flow to Triple by 2030

Investments in artificial-intelligence infrastructure are accounting for roughly one-fifth of U.S. economic growth so far in 2026, according to a Goldman Sachs estimate. The four leading hyperscale companies – Alphabet, Amazon, Meta and Microsoft – are slated to spend about $800 billion in capital expenditures this year, ten times their 2019 level.

The financing mix is shifting toward debt markets, with the firms expected to issue $250 billion of investment-grade bonds by the end of 2026. Apollo chief economist Torsten Sløk notes that the surge in AI spending is tightening cash flow at firms traditionally known for large cash reserves. Alphabet reported its first quarterly negative free cash flow since its 2004 IPO.

Sløk argues that future cash generation must keep pace with spending. Wall Street consensus projects operating cash flow to climb from $600 billion in 2025 to roughly $2 trillion by 2030, more than tripling in five years. He warned clients that a shortfall could weaken the AI trade, widen credit spreads, force cuts to capital expenditures and slow U.S. GDP growth.

Market data on Monday showed the Nasdaq Composite rise 2.3% to a record high, driven by gains in Meta, Arm and Intel, while the S&P 500 advanced 1.5%. However, the rally was narrow, with 30 S&P 500 constituents hitting 52-week lows compared with only seven reaching 52-week highs.

Morgan Stanley analysts, led by chief equity strategist Michael Wilson, remain optimistic about AI capital spending, citing strong demand for compute power, evidence of benefits for adopters, higher computer lease rates and potential advantages for society.