Big Tech's AI spending spree raises cash burn fears for Alphabet, Amazon, Meta

Big Tech's massive artificial intelligence spending is intensifying investor concerns about cash burn, with Alphabet, Amazon, and Meta facing market pressure while Microsoft is rewarded for generating strong free cash flow alongside its AI investments. Alphabet reported negative free cash flow of $9.07 billion, Amazon saw $42.4 billion in cash burn over the trailing twelve months, and Meta posted negative free cash flow of $2.12 billion in the third quarter. Microsoft, however, generated $18.6 billion in free cash flow with 48% Azure growth, distinguishing itself from peers. Experts remain divided on whether the selloff is justified, with some noting that negative free cash flow can be temporary during capacity investments, while others point to slowing growth in core businesses like Google Search and Amazon retail as additional concerns.