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

Almost four years into the artificial intelligence boom, the world's biggest tech companies are still making grand promises about the future. The problem is, they're burning through their cash in the process. AI spending among the megacaps is projected to reach $765 billion this year, before rising to nearly $1.2 trillion in 2027, according to Goldman Sachs. Amazon boosted its capital spending forecast for the year on Thursday to $220 billion, the highest among the four hyperscalers.Amazon also reported negative free cash flow for the trailing 12 months of $7.6 billion, a day after Meta disclosed a 91% drop in cash generation from a year earlier. Last week, Alphabet said cash flow turned negative for the first time on record, a stunning development for one of the most profitable companies on the planet.Alphabet finance chief Anat Ashkenazi told analysts on the earnings call that free cash flow will remain under pressure as the company seizes on the "AI opportunity." With tech earnings season largely wrapping up this week — Nvidia is set to report on Aug. 26 — it's become readily apparent that AI investments are distorting balance sheets, even as industry leaders continue to tout th...