What capital spending buys
Capital spending is money for things that last for years: land, buildings, servers, network gear and the power to run them. It has its own line on the cash flow statement, apart from the cost of running the business each year. A building bought today is paid for today, then counted as a cost bit by bit over its life.
For a cloud, almost all of it is data centers. A data center is a building full of servers, with its own power supply, cooling and fiber. The servers inside it are what a cloud rents to its customers by the hour.
How fast it grew
Microsoft spent $115.9 billion in fiscal 2026, against $20.6 billion in fiscal 2021. Alphabet went from $22.3 billion in 2020 to $91.4 billion in 2025. Meta went from $15.2 billion to $69.7 billion over the same years. Amazon went from $40.1 billion to $131.8 billion.
Oracle moved fastest. It spent $2.1 billion in fiscal 2021 and $55.7 billion in fiscal 2026, 26 times as much.
Each of them names AI as the reason in its 10-K. Training a large model takes thousands of chips running for weeks. Running it for customers afterwards takes more chips still, every day. That is far more computing than the work a cloud did before.
Faster than revenue
Revenue grew too, but not as fast. Microsoft's revenue doubled over those five years, from $168.1 billion to $331.8 billion. Its capital spending grew 5.6 times. So the share of each revenue dollar going into buildings and chips rose from 12.3% to 34.9%.
The others moved the same way. At Alphabet the share went from 12.2% to 22.7%, and at Meta from 17.6% to 34.7%. At Oracle it went from 5.3% to 82.6%.
How much of the cash it takes
A business pays for buildings out of the cash its operations bring in. What is left after capital spending is free cash flow.
Alphabet spent 55.5% of its operating cash on capital spending in 2025. Meta spent 60.2%, and Microsoft 63.4% in fiscal 2026. All three still had large free cash flow: $73.3 billion at Alphabet, $67.0 billion at Microsoft and $46.1 billion at Meta.
Amazon spent 94.5% of its operating cash. That left $7.7 billion of free cash flow on $716.9 billion of revenue. Oracle spent 174.1%: $55.7 billion against $32.0 billion of operating cash. Its free cash flow was negative $23.7 billion in fiscal 2026, so it paid for part of its building with borrowed money.
Why they spend ahead
A data center takes years to plan, power and fill. Power is often the slowest part: a large site can need as much electricity as a small city. The chips are bought before the work they will run arrives, because a cloud with no room cannot take a new customer.
When the work arrives, the buildings earn back their cost over many years. Until then, the cost shows up first in free cash flow. That is why the same five companies can report record revenue and much less free cash than before. Amazon and Oracle show it most plainly today.
