Fears over $828 billion AI capex spending spree help erase $1 trillion in market value

The richest companies in the history of the world are spending so much on the infrastructure backing AI that they’re burning through billions in cash and threatening a recent AI-fueled stock surge as Wall Street wavers.

The latest financial disclosures by four of the biggest hyperscalers, Amazon, Alphabet, Microsoft, and Meta, as well as Elon Musk’s up-and-coming AI player, SpaceX, which includes xAI, revealed that the small group of tech heavyweights is set to invest as much as $828 billion on capital expenditures this year. That spending includes data centers, high-powered chips, and other infrastructure that fuels AI.

Making up the $828 billion in capex spending is an expected spend for 2026 of $220 billion from Amazon, up to $205 billion from Alphabet, approximately $170 billion from Microsoft, up to $145 billion from Meta, and up to $88 billion from SpaceX, according to company earnings releases and calls.

At this point, the massive AI infrastructure bill has surpassed the market value of well-known businesses like energy giant ExxonMobil or payments company Mastercard and is even approaching the roughly $1 trillion America is spending on defense this fiscal year, itself the largest in the world. Several banks, including Evercore and Bank of America, see capital expenditure related to AI hitting $1 trillion in 2027.

Partly in response to this massive spending, stocks tumbled on Friday, leading both the Nasdaq and the S&P 500 to their worst one-day performances since June. The tech-heavy Nasdaq closed down 2.9%, while the S&P 500 fell 1.8%. Nasdaq 100 companies lost more than $1 trillion in market value. Sour guidance for the last three months of the year from U.S. chipmaker Intel also played a role.

Some of the market’s jitters can be drawn to concerns over free cash flow, which has long been a source of........

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