Amazon, Alphabet, Meta, Microsoft and Oracle—the five big cloud-computing hyperscalers—will spend an estimated $800bn in 2026 on computers and data centres to run AI models. At around 40% of revenue, that exceeds the share of revenue the oil industry sunk into capex during the 2010s shale boom and the telecoms industry during the 1990s dotcom bubble.
Amazon, Meta and Microsoft are all expected to report negative free cash flow in at least one quarter in 2026. Alphabet will only just stay above water; Oracle is already drowning. The five firms together have raised $260bn from bond markets since the start of 2025, about a quarter of all such borrowing by listed American non-financial firms. Almost a third of 2026 bond issuance has been in non-dollar currencies. Alphabet plans to issue its first yen bonds.
Total future revenue agreements at Amazon, Alphabet, Microsoft and Oracle (Meta is a buyer of compute) have risen to $2trn, from $730bn a year earlier. Off-balance-sheet leases for data centres yet to be built total $820bn (up from $270bn a year ago); Amazon, Alphabet, Meta and Oracle disclose a further $680bn of other commitments. In 2025 a special-purpose vehicle for Meta's Louisiana data centre issued the biggest single corporate bond in history. Most of Oracle's future revenue is concentrated on OpenAI, and its CFO has talked of "uncoupling" capex from cashflow.
The chip-supplier beneficiaries—Broadcom, Micron, Nvidia and Sandisk—together account for about a quarter of forecast S&P 500 profit growth in 2026. Goldman Sachs forecasts that data centres will account for 8.5% of America's peak power demand by 2027, up from 4.1% in 2025. Anthropic's annualised recurring revenue is set to reach $50bn by the end of June 2026.
QOTD: "Sure, I turned down a drink once. Didn't understand the question."