Big Tech Is Spending Billions on AI Instead of Giving Money Back to Investors

America's biggest technology companies made more money than ever in the first nine months of 2026, but they gave back very little of it to the people who own their stock. Companies like Microsoft, Google's parent Alphabet, Amazon, Meta, and Oracle returned only 9.3% of the cash they earned to shareholders — the lowest share in at least 15 years. The reason is simple: they are spending enormous amounts of money building artificial intelligence, or AI, systems instead.

Together, those five companies brought in a record $542.9 billion from their businesses in the first nine months of 2026. That is a 29% increase from the year before, which sounds impressive. But their spending on AI equipment and data centers doubled to $556.9 billion during the same period. For the first time in records going back to 2011, what they spent was more than what they earned from their businesses.

When a company spends more than it earns, it has what is called a 'free cash flow deficit.' The five tech giants ended up with a combined deficit of $14 billion. Just a year earlier, they had a surplus — meaning extra money left over — of $143.5 billion. That is a huge shift in a very short time.

One of the biggest changes has been in 'buybacks.' A buyback is when a company uses its cash to buy its own shares of stock from investors. This is popular because it reduces the number of shares out there, which makes each remaining share worth a little more. The five companies slashed their buybacks by 83%, dropping from $81.8 billion to just $13.6 billion. Alphabet and Meta did not buy back a single share in all of 2026, even though they bought back $66.5 billion worth just the year before.

Dividends — regular cash payments companies make to shareholders — actually went up slightly, from $33.9 billion to $37 billion. Companies treat dividends as a promise they must keep, so they are less likely to cut them. Buybacks, on the other hand, are optional, so they were the first thing to go when money got tight. Amazon pays no dividend at all and has not bought back shares since 2022.

Because the companies had less free cash than they needed, they had to find other ways to pay investors. To cover the $50.6 billion they paid out, the companies used cash savings, took on debt, or sold new shares. Amazon, for example, spent $75.9 billion on new equipment in just one quarter — nearly 80% more than it earned from its operations during that same period. It also borrowed $48.1 billion in long-term debt to help cover the gap.

Buybacks matter for a reason that goes beyond just the cash amount. When a company reduces the number of its shares, the same amount of profit gets split among fewer shares. This raises what is called 'earnings per share,' or EPS, even if the company's total profits did not grow. Alphabet, for instance, reduced its share count by 9.5% between 2020 and 2025 through buybacks. That gave its EPS a boost of about 2% a year without the company actually growing its profits.

Now that buybacks are almost gone, companies will need to show real profit growth to keep investors happy. That is a harder challenge, especially since new AI data centers also bring rising costs called 'depreciation charges' — the expense of gradually accounting for aging equipment. Experts say investors pay close attention to EPS, so this change is a big deal. Mark Schilsky, a tech specialist at JPMorgan, noted that investors care 'so much more about EPS than FCF,' meaning they focus more on per-share earnings than on overall cash flow.

There is no sign this will change soon. Amazon has said it expects to spend about $220 billion on AI infrastructure for the full year, and the other companies have hinted their spending will keep rising too. Investors who own these stocks are making a kind of bet — that AI will eventually create so much profit that it will be worth all this spending. For now, though, they are receiving less cash than they used to. Ehren Stanhope of Franklin Templeton summed it up: for 15 years, tech companies gave extra cash back to investors, but now they are asking investors to give them even more money to fund the AI race.