Tech companies are making record amounts of money, posting major gains in the most recent quarter compared to the same period just a year ago.
But despite all that income, these same companies are struggling to save any cash left over thanks to unfathomably huge AI-related expenses, a trend that could imminently put them firmly in the red.
As the Washington Post reports, the situation is about to go from concerning to potentially catastrophic. According to data compiled by S&P Global Market Intelligence, free cash flow — the amount of cash that remains after expenses — is about to drop off a cliff for the five leading AI companies, including Google, Meta and Oracle, after sinking to just above zero for the year.
In 2027, cash flow is expected to slide to a stunning negative $125 billion for those five companies alone, a shocking illustration of how far executives are willing to stretch themselves to keep up in the ongoing AI race.
