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Microsoft, Google, Amazon, Meta and Oracle Expect a Negative Cash Flow of $125 Billion Next Year (washingtonpost.com) 49

Posted by EditorDavid from the in-the-red dept.
The Washington Post shared surprising news this week about five top AI companies.

Microsoft, Google, Amazon, Meta and Oracle "are spending so much on developing AI and delivering it to customers that they're expected to bleed cash in the coming year, according to a Washington Post analysis of data compiled by S&P Global Market Intelligence." Free cash flow, which measures the cash left over after paying expenses and AI infrastructure costs, is now expected to shrink to almost nothing for the five companies combined in 2026, and decline again to negative $125 billion the following year... AI spending by Amazon and Google pushed the companies to an ignominious milestone: They lost more cash in the past three months than any other large U.S. companies, according to S&P Global data. Investment analysts expect Elon Musk's SpaceX to show even worse cash bleeding this week.

Microsoft, Google, Amazon, Meta and Oracle Expect a Negative Cash Flow of $125 Billion Next Year More | Reply

Microsoft, Google, Amazon, Meta and Oracle Expect a Negative Cash Flow of $125 Billion Next Year

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  • Woudn't be surprised if it all comes crashing down (Score:5, Insightful)

    by hwstar ( 35834 ) on Saturday August 08, 2026 @01:56PM (#66279166)

    Where is the prudent restraint?

    What we have here are business chasing other business over the same AI stuff. That's a positive feedback loop which at some point is going to become unstable and crash.

    Will these companies survive that? Maybe some, but not all of them.

    Will the investing public get hurt? Very likely.

    • I don't think this will kill Microsoft, Google, Meta, Amazon or Oracle. Their worwr case is having to dump their AI programs, take a stock hit, and issue some bonds. They all have enough revenue for the foreseeable future that they won't bankrupt.

      • Re: Woudn't be surprised if it all comes crashing (Score:5, Interesting)

        by gtall ( 79522 ) on Saturday August 08, 2026 @05:15PM (#66279426)

        Oracle may not, they are way over leveraged. Ellison caught FOMO disease. The Fed. Gov. cutting them a deal with the Department of DEFENSE was throwing them a fish to help them get by a disaster, but it's still peanuts compared to what Ellison sunk into the craze. And their reputed expected winnings are from AI companies, just the companies that will take it in the neck if China AI steals their markets.

        • What would happen if Oracle went down?

          I guess they would be asset stripped and their software treated like VMWare is treated by Broadcom - basically only companies that got incompetently trapped would stay on it and they would have to pay massively more just to get much worse service. Oracle DB itself is going down for sure. Amazon can definitely migrate companies off that without huge problems. Oracle's business software can be replaced by SAS consulting and so on?

          I guess that it's time for people that ear

    • Re:Woudn't be surprised if it all comes crashing d (Score:4, Insightful)

      by Ol Olsoc ( 1175323 ) on Saturday August 08, 2026 @03:32PM (#66279314)

      Where is the prudent restraint?

      What we have here are business chasing other business over the same AI stuff. That's a positive feedback loop which at some point is going to become unstable and crash.

      It's another bubble. The size of this bubble is pretty impressive. When it pops, much shit shall hit the fan.

      I have thought for some years now that AI is inevitable, but just like the dot-com bubble, and the subprime loan bubble, the present paradigm isn't sustainable, and companies are acing toward data centers that require restarting ancient nuc reactors, and making a hella mess out of groundwater.

      One of the telling tremors is Texas, which has so many data centers planned, they cannot provide enough power to them. So they are "temporarily halting them. Only 474 GW, https://hardware.slashdot.org/... [slashdot.org]

      Unsustainable concepts, but we do tend to march like lemmings to the cliffs.

      • Re: (Score:1)

        by Anonymous Coward

        It's another bubble.

        But previous bubbles had some form of value and income, and there was something of value left for others to purchase. This AI bubble is different, and when it pops it's going to be really painful.

        • AI definitely has some value and income.

          Not as much as it's being hyped as, but significant. Anthropic for example will get nearly 50 billion in revenue this year.

          And the value of people using AI smartly is definitely not zero. We're in the late 90s internet part of this. In 10 years there will be AI that we take for granted making some companies billions and a lot of failed companies. There's no reason to think otherwise.

          It's also not going to replace lawyers and doctors, it will be part of how they do the

          • Re: (Score:2)

            by NetCow ( 117556 )
            If you have 50 billion income on ten times as much expense, and expense is growing faster than income, then you have negative value.
        • I remember a discussion about this when Facebook went to the stock market. Shares sold good, but no one knew how they were going to make money. I also think it is all inflated, but it is not all hot air. I see less and less people using Google and more and more people using chatgpt to search the web.
          I am one of them. Was repairing a water pump and needed an adapter. Local shop was clueless. Described what I needed to gpt. It searched around and found the perfect piece in a webshop. Would have taken me a

        • A lot of companies went bust during the dot com crash. Arenâ(TM)t a number of infrastructure companies handing free tokens to ai companies as investment, then booking use of those tokens as revenue, then going out spending cash or borrowing money to build hundreds of billions in capex?

    • They're paying each other. Google is renting out processing while also renting processing elsewhere. Selling hardware and then renting the same hardware back for their own use. It may make sense on some level (more than it sounds at first glance), but it's very circular. What does this mean? It means we can't look at a single company's finances. We have to look at the industry as a whole, because a lot of those balance sheet items cancel each other out.

    • âoe Will these companies survive that?â

      Ask your AI!

    • Re: (Score:2)

      by taustin ( 171655 )

      Will the investing public get hurt? Very likely.

      Followed by taxpayers taking in the shorts to pay for the bailouts. And there will be bailouts.

    • Re: (Score:2)

      by gweihir ( 88907 )

      They have done massive circular financing and massive burning of stupid ("investor") money. I would be very surprised if it does not come crashing down at this point. No matter what happens now, they cannot get profitable in the next few years. That is just completely outside of anything realistically possible. And at the same time, the problems with "LLM for everything" become more and more obvious.

    • Re: (Score:2)

      by allo ( 1728082 )

      Which of these four is likely to die? Tell us, so we can laugh.

  • Is this fine, really? (Score:3, Interesting)

    by GeekWithAKnife ( 2717871 ) on Saturday August 08, 2026 @02:09PM (#66279182)
    When most of the jobs they removed due to using AI instead need to be rehired for because unsubsidised AI usages is more expensive I'm sure it'll all work out.

    They will ask later, "but were there any signs of a bubble?" - for those that are busy with stocks that are "going to the moon" and riding the new paradigm I'm sure this is perfectly sustainable.

    I, personally, use AI with great results that deliver actual commercial benefit for me...however there are 1000 people for every one person like me that manage to just spend and achieve mediocre or worse results and I say this to ask one question: If all this AI is really so great, so effective and so needed why then must it be subsidised?

    • Re:Is this fine, really? (Score:5, Funny)

      by reiterate ( 1965732 ) on Saturday August 08, 2026 @02:18PM (#66279196)
      Phew thanks for reassuring us that you're a very special, one in a thousand person, and that you're objectively using this stuff correctly, We needed that reinforcement.

      • That was the best/only joke Slashdot can come up with these years? Sadness.

        I was hoping to see something about AI-powered FinTech counter-wagers to protect each other. Sort of a corporate cancer circle jerk.

        Oh how about a grand scheme to get the money back based on wagers by human suckers as to which AI will win the race? They could let Microsoft hold the pot since they apparently got left out of the race. My money would be on Oracle for most secretive and ruthless and evil and therefore the most likely win

        • Re: (Score:2)

          by shanen ( 462549 )

          My bad. I forgot that Microsoft had been mentioned. More evidence of senility? Or I just can't take Microsoft seriously based on my experiments and experiences with Copilot? So let IBM hold the pot for old times sake?

      • I consider it a public service. You don't have to thank me. I'm special like that. ðY(TM)f
    • Oracle borrowed something like $600 billion to fund AI projects.
      Their biggest customer here is OpenAI to the tune of around $300 billion, a customer that is expected to make a loss of around €14 billion this year.
      Probably fine?

    • Re: (Score:2)

      by gweihir ( 88907 )

      While LLMs have some specific areas where they are useful, there is nothing positive or useful about the insane hype they are used in.

      • You are going to go a long way in your quest to understand and have a clue about AI, because you've got a long way to go.

        • Re: (Score:2)

          by gweihir ( 88907 )

          You continue to be without insight. Nothing new.

          • Don't sell yourself short. You've come from there is no such thing as AI to and it can't do possibly do what it definitely does as the way to "it has some uses" in just a few years. While you are only a few years slow on the uptake I'm thoroughly convinced that I'm just a couple more years you can get yourself to the point where your understanding is only a decade behind the curve.

  • "surprising" (Score:3)

    by ardmhacha ( 192482 ) on Saturday August 08, 2026 @05:08PM (#66279422)

    Only to people who have no knowledge of the dot com boom.

    • History teaches us that people do not learn from history and keep making the same mistakes...

    • Re: (Score:3)

      by Torodung ( 31985 )

      There were winners in the dot-com boom/bust. The problem is the wins always rush to the top, and nothing trickles down.

      Some pigs got slaughtered. That's all. Bulls make money. Bears make money. Pigs get slaughtered.

      But more importantly, the new market's signature dish is the distribution of most of the wealth to the few, who then rig up the next boom/bust to "distribute" even more wealth to themselves. This is why this activity is being engaged in so fearlessly. And it is, as real economic value crawls to a

      • There were winners in the dot-com boom/bust. The problem is the wins always rush to the top, and nothing trickles down.

        Nah. It's just like every previous innovation-driven boom (railroads, oil, telecoms...) the growth and buildout phase generates incredible new wealth, highly concentrated (Vanderbilt, Stanford, Rockefeller, Carnegie, etc.), . Then there are several decades of adaptation and adoption, during which the benefits accrue to the population broadly. This doesn't decrease the wealth of those who got crazy rich during the boom, but their wealth stops growing rapidly and they just become the new "old money". Then

    • Exactly. That's how we know AI is just hype and will not last, the same way that happened with online commerce!

  • Transfer of cash to NVIDIA (Score:3)

    by david.emery ( 127135 ) on Saturday August 08, 2026 @06:20PM (#66279512)

    Horace Dideu characterized this as an unprecedented transfer of cash from Microsoft, Google, Amazon, Meta and Oracle shareholders to NVIDIA shareholders. Those are companies with real, substantial revenues and until now, significant positive cash flow (yielding shareholder value.) Draining the tub this way is something that should worry those shareholders. But of course, it's a great year to be an NVIDIA shareholder, with all those other companies (plus OpenAI, Anthropic, and other smaller AI companies) all pouring their free cash flow AND their growing debt, into NVIDIA, and into other companies that supply AI data centers.

  • That has been clear for a while now. And, unless the AI hype collapses, the next year will not be any better.

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