Big Tech Burned $496.7 Billion on AI Gear. Buybacks Paid the Bill

Microsoft, Alphabet, Amazon and Meta spent a combined $496.7 billion in cash on property and equipment in the first nine months of this year — almost exactly the $498 billion their operations brought in over the same stretch. That's the core of a MarketWatch analysis of company financial statements, and it captures a sharp reversal in how Big Tech handles shareholder money. Almost every operating dollar now goes back into buildings, servers and chips.

A year earlier, the same four companies spent $257.4 billion on property and equipment against $401.7 billion of operating cash. Capital spending has since jumped about 93%. Operating cash flow grew just 24%.

Where did the buybacks go?

Alphabet and Meta Platforms spent a combined $66.1 billion buying back their own stock in the first nine months of last year. This year, over the same nine months, they spent nothing on buybacks. Both kept paying dividends.

Alphabet went further. In June it announced $80 billion of stock sales to help fund artificial-intelligence infrastructure, with Berkshire Hathaway agreeing to buy $10 billion. A company that spent $39.8 billion repurchasing its own shares in the first nine months of 2025 is now issuing new ones.

Why does that matter? A buyback retires shares, so the same profits get divided among fewer of them. Issue new shares, and the math runs in reverse — each remaining shareholder owns less. Shareholders are now being asked to take less cash today in exchange for AI-driven profits that depend on the spending paying off.

Who's spending what?

The analysis, based on the companies' financial statements, breaks down like this:

• Alphabet spent $132 billion on property and equipment over nine months against $127.1 billion of operating cash — more going out than coming in. It borrowed another $28.7 billion via a note sale in the third quarter. Its $40 billion gradual share-sale program, mainly to cover taxes on employee stock awards, raised $12.4 billion in Q3.
• Meta spent $83.1 billion on equipment against $96.9 billion of operating cash. It plans a new class of nonvoting shares in January 2027 to help fund investment, acquisitions and employee pay.
• Microsoft is the comfortable one. Its buybacks totaled $9.7 billion from January through September, down from $10.7 billion a year earlier. September-quarter purchases fell 26% to $2.9 billion.
• Amazon bought back no stock in either year. Its equipment purchases exceeded its operating cash, but it added nothing to the sector-wide buyback decline.

The totals cover each company's whole business, not only AI, and exclude finance-lease equipment and lease repayments. Amazon's figure is before deducting asset-sale proceeds and incentives. Microsoft's fiscal year ends in June, so reporting periods were aligned to January through September.

Is the bet paying off yet?

The money isn't obviously wasted. Cloud businesses are growing faster than they have in years. Amazon Web Services revenue rose 39% in the September quarter, its fastest pace in nearly five years. Microsoft reported 48% growth at Azure. "Our AWS investment in functionality and infrastructure is working," Amazon CEO Andy Jassy said in the company's results release.

But fast revenue growth doesn't settle the return question. The new data centers cost money to run, chips wear out, and some expansion is now debt-financed. Accounting can flatter the picture, too: companies pay for equipment up front but charge it against profits gradually as depreciation — so profits can look strong while cash pours out the door, and those charges will start weighing on earnings as more equipment goes into service.

What does Apple's path show?

Apple did $61.7 billion of buybacks in the three quarters ending in September — more than six times what Microsoft, Alphabet, Amazon and Meta repurchased combined. Over the same period, Apple spent just $6.7 billion on property and equipment.

Even Apple's buybacks slipped 8.1% from $67.1 billion a year earlier, though September-quarter repurchases rose 20.7% to $24.3 billion. That doesn't prove Apple's restraint is right. It does mean these stocks are no longer the same bet: Apple spends nine times as much on buybacks as on new equipment, while the others ask shareholders to fund the buildout.

Two numbers will show whether the bet pays off: whether operating cash starts growing faster than capital spending, and whether shares outstanding are actually shrinking. At Alphabet, the new stock sales push the second number the wrong way. Big Tech's managers have put shareholders' money to work — now they have to prove it earns more there than it would have in shareholders' pockets.