Alphabet burned $5.9 billion in the second quarter, or about 8.71 trillion won, as an expansion in artificial intelligence investment shakes big tech’s cash-generating structure.

Bloomberg reported on Wednesday that Alphabet recorded quarterly cash burn for the first time. Investors are also watching the AI investment plans of Microsoft, Meta Platforms and Amazon, which report earnings next week.

The results show that AI competition is changing big tech’s financial structure. Big tech has invested in new businesses on the back of high profit margins and ample cash flow. Now the pace of AI infrastructure investment is rising faster than the pace of cash generation. AI-related spending by major big tech companies is expected to exceed $700 billion this year.

Alphabet’s Google Cloud revenue rose 82%, helped by demand for AI computing rentals, but it was not enough to offset rising costs. The company expects to invest an additional $15 billion in 2026 and plans to expand AI infrastructure investment next year as well. The structure means the burden of investment in data centres and computing infrastructure increases as the cloud business grows.

Markets are focusing on the possibility that other big tech companies could show a similar trend. Ahead of earnings, Microsoft, Meta and Amazon shares fell 2 to 4 percent before the start of trading on Wednesday, and Alphabet slid 5 percent. Investors are concerned that capital spending, depreciation and operating expenses could rise faster than AI revenue.

Charu Chanana (차루 차나나), chief investment strategist at Saxo Markets, projected that the scale of AI investment is likely to expand further. She said companies including Microsoft still face a shortage of computing power, so pressure to increase investment will persist. Investors will also try to confirm whether AI businesses can generate enough profit to offset massive capital spending and operating costs, she said.

The outlook for next year is also not easy. Based on market expectations, Alphabet and Amazon are being discussed as likely to continue burning cash in 2026. Meta’s cash flow is forecast to drop 95.7 percent to $1.85 billion, and Microsoft’s cash generation is also expected to fall to about half of the estimate for the previous fiscal year.

Capital spending as a share of revenue is also rising rapidly. Meta is expected to rise to 54.9 percent from 35.9 percent, Alphabet to 41 percent from 23 percent, Microsoft to 45 percent from 31 percent, and Amazon to 25 percent from 18 percent. It means that even if revenue increases, companies have to plough a corresponding amount of funds back into AI equipment and infrastructure.

Alphabet, however, also proved a competitive edge. Google Cloud has continued to grow faster than rivals in recent quarters, and Alphabet said it would lease even other companies’ data centre capacity to meet surging customer demand. Profitability could fall somewhat, but the company judges securing the market is more important.

Richard Clode (리처드 클로드), a portfolio manager at Janus Henderson Investors, said Alphabet is securing a competitive edge across the AI ecosystem, from its own AI chips to a user base of billions.

Rivals, by contrast, face two tasks at once: defending growth rates and controlling costs. Amazon Web Services, the largest cloud operator in the United States, and Microsoft are expected to maintain cloud growth, but there are forecasts that pressure on their shares could persist as capital spending burdens rise with expanded AI investment.

Competition in AI infrastructure is also intensifying. Meta is reviewing leasing computing resources to Anthropic, showing competition and cooperation between big tech and AI infrastructure companies are both expanding.

In next week’s big tech earnings, the market’s focus is expected to be on how much more large-scale AI investment companies will have to bear, rather than on AI revenue growth. As AI competition intensifies, the market’s scrutiny of big tech’s cash generation and profitability is also expected to become tougher.