Big Tech’s AI buildout drives $1.46T in physical assets

The four largest U.S. technology companies spent a combined $170 billion on capital expenditures in the second quarter of 2026, a 72 percent increase from a year earlier, as the artificial intelligence infrastructure buildout enters a new phase defined not just by spending but by mounting debt and growing investor unease.

Amazon Amazon.com, Inc. ↗ 0.82%, Alphabet ↘ 0.88%, Meta ↗ 0.37%, and Microsoft ↗ 0.03% have now amassed $1.46 trillion in combined property, plant, and equipment — a 140 percent increase over three years and enough to surpass several global oil majors in physical assets, according to Nikkei Asia data cited by Business Standard. Wall Street estimates compiled by FactSet suggest the four companies will collectively invest roughly $1.5 trillion on data centers and equipment over 2026 and 2027.business-standard+1

The Debt Machine Behind the Buildout

To finance this expansion, tech giants have flooded the investment-grade bond market. JPMorgan ↗ 0.34% now forecasts that technology, media, and telecommunications sector bond issuance will reach $540 billion in 2026, up from a prior estimate of $450 billion. Hyperscale cloud providers alone are expected to account for $317 billion of that total.moomoo

NVIDIA ↗ 2.27% priced a $25 billion bond offering in June — its first since 2021 — attracting $85 billion in orders. Amazon raised $25 billion in an eight-part bond sale in early July, bringing its total 2026 debt issuance past $92 billion. But signs of market fatigue are emerging. Bank of America noted that Amazon's offering showed the weakest new-issue performance of any hyperscaler since Meta's $30 billion sale in October 2025, with investors "pushing back" on the relentless supply.bloomberg+3

JPMorgan strategists acknowledged that credit spreads on hyperscaler bonds widened by roughly 15 basis points after the market absorbed approximately $75 billion in new supply during June and July.moomoo

Rising Costs and Hidden Obligations

The spending surge is also creating obligations that dwarf what appears on corporate balance sheets. A Nikkei Asia investigation found that Alphabet, Microsoft, Amazon, Meta, and Oracle ↗ 2.47% collectively hold $1.65 trillion in off-balance-sheet liabilities — primarily long-term lease and equipment purchase commitments — exceeding their combined reported debt of $1.35 trillion.chosun+1

Meanwhile, depreciation costs are climbing as data centers come online. Combined depreciation expense for the four largest spenders reached $44.5 billion in the April-June quarter, representing nearly one-third of their total operating profit. Meta cited higher depreciation as a factor in its first operating profit decline in three years.business-standard

As a Barron's News Corp ↘ 4.19% analysis noted, the five largest spenders are on track for roughly $800 billion in combined capital expenditure this year — a figure that raises the question of whether AI revenue can ultimately justify what JPMorgan called a "defining feature" of corporate finance for the next several years.barrons+1