$725 billion AI investments drag down Silicon Valley cash flow: Four giants' Q3 drops to $4 billion

CryptoWorld News: AI infrastructure investments, totaling up to $725 billion, are overextending the cash flows of Silicon Valley’s four giants (Amazon, Alphabet, Microsoft, Meta). According to Wall Street forecasts, the combined free cash flow of these four companies will drop to about $4 billion in the third quarter of this year, well below the quarterly average of $45 billion since the pandemic, and will hit a new low since 2014 for the full year. To cope with the massive infrastructure consumption, Alphabet and Meta have paused share buybacks and issued debt; Alphabet has paused its stock repurchase plan for the first time this year, issuing a total of $48 billion in bonds, while Meta has issued $55 billion in debt over the past six months. Microsoft’s asset value on its balance sheet has increased to $191 billion since mid-2022, and Amazon expects to burn $10 billion in cash this year, with plans to invest $200 billion by 2026. Companies like Meta have moved hundreds of billions of dollars’ worth of data center projects off their balance sheets through special purpose vehicles (SPVs), bringing in external funding.