cnbc_topnews

Dwindling cash and soaring memory costs: Tech's AI buildout has ballooning price tag

📰 source: cnbc_topnews · 💼 business

megacap tech spending on ai is exploding, with goldman sachs projecting $765b this year and nearly $1.2t in 2027. but the bill is crushing cash flow. amazon reported negative free cash flow of $7.6b, alphabet went cash flow negative for the first time on record, and meta's cash generation fell 91% year over year.

the culprit: a memory crunch. elon musk called memory pricing 'insane,' and amazon's andy jassy said inflated memory chip prices drove capex guidance higher. apple, which spends less on ai infrastructure, still got hit — it raised prices on macs and ipads and warned on supply constraints. ceo tim cook said memory prices will keep rising and affect the business this year.

investor reactions split. microsoft had its best day since 2008, and amazon popped on strong cloud growth, while tesla, alphabet, and meta all fell. meanwhile, chinese ai labs are releasing cheap open-weight models, narrowing the gap with openai and anthropic, which threatens the whole ai trade.

why it matters: ai buildout is burning cash at megacaps, and investors are starting to punish heavy spenders while rewarding those with clear payoff.

source: cnbc_topnews
sentiment: -0.60 · impact: 0.80

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Surprise fall in US jobs last month as slow summer continues

Homes are selling below asking in 38 of the 50 biggest U.S. cities—if you can afford one

China is gaining ground in AI. But the U.S. still has a major advantage

US strikes $1.2bn deal to pay German firm to halt offshore wind projects