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<p>The $740 billion AI capital expenditure in 2026 is expected to grow by about 70% year-on-year, consuming the operating cash flow of major U.S. tech giants. Except for Microsoft, other companies may see their free cash flow turn negative. AI-related debt accounts for about 14% of the U.S. IG bond market, with funds shifting from equity market premiums to the bond market. As cash flow and financing pressures intensify, the market's tolerance for error decreases. Once the pace of returns slows down, risks will spread to a broader range of assets</p>

- The capital expenditures of major tech firms for AI have surged to almost $740 billion in 2026, significantly exceeding market expectations and previous spending levels.  
- A Goldman Sachs analysis indicates that if this expenditure level is reached, it will approach the total cash flow of these cloud companies, raising concerns about sustainability and potential financial strain.  
- The unprecedented scale of investment in AI, coupled with deteriorating profit projections, has led to fears of a debt-driven bubble, with significant implications for the tech industry's future.

Wallstreetcn

"The AI War" cannot afford to lose! What does it mean for the market if the US stock market's Mag 7 burns its cash flow into negative this year?