Big Tech is spending $500 billion on AI instead of buying back stock
Alphabet and Meta stopped buying back their own stock.
The short version
- They are pouring billions into data centers and computer chips.
- Almost every dollar their operations brought in went straight into equipment.
- Shareholders get less cash today while companies build for the future.
Big Tech is spending its cash on computer servers instead of returning money to shareholders, according to MarketWatch. Alphabet, which owns Google, and Meta Platforms, which owns Facebook and WhatsApp, spent a combined $66.1 billion buying back their own stock in the first nine months of last year.
Over the same nine months this year, they spent nothing on buybacks. Both companies kept paying dividends, but the larger way they return cash to investors has stopped. Alphabet even started issuing new shares, including a deal where Warren Buffett's Berkshire Hathaway agreed to buy $10 billion of stock.
At the same time, cash is pouring into data centers, specialized chips, and the physical machinery behind artificial intelligence. Microsoft, Alphabet, Amazon, and Meta spent a combined $496.7 billion in cash on property and equipment in the first nine months of 2026.
That is nearly all the $498 billion their businesses brought in over the same stretch. A year earlier, the same four spent $257.4 billion against $401.7 billion of operating cash. The spending has nearly doubled while cash generation grew much slower.
Alphabet now spends more than its operations bring in, forcing it to borrow money and sell new shares. Amazon Web Services revenue rose 39% in the September quarter, its fastest pace in nearly five years, showing strong demand for cloud computing. Yet the new data centers cost money to run, the chips wear out, and future profits depend entirely on whether this massive gamble pays off.
Photo: Austin McKinley, CC BY 3.0, via Wikimedia Commons
