Microsoft Funds AI Investments with Cash Reserves While Amazon Borrows
Major tech companies are funding their artificial intelligence (AI) expansions through different financial strategies, as revealed in recent reports. Microsoft is using its strong cash flow and reserves to fund its AI investments. The company generated $55.4 billion in operating cash flow last quarter, with free cash flow of $19.6 billion after capital expenditures. It has a low debt level ($40.3 billion) and holds $76.8 billion in cash equivalents. In contrast, Amazon is relying heavily on borrowing to finance its AI infrastructure buildout, having issued over $25 billion in bonds this year alone. Alphabet also turned to the bond market for additional funding, issuing new long-term debt including a 100-year bond and halting share buybacks. Meta has split costs by partnering with BlackRock on data center projects while Oracle is taking on significant debt as it expands its AI capabilities.
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