Alphabet's cash burn signals Big Tech AI spending frenzy

Alphabet's operating cash flow dropped 12% in Q2 2026 to $18.4 billion, while capital expenditures surged 45% to $14.2 billion, driven by AI infrastructure investments. The widening gap between spending and cash generation has alarmed investors, with Alphabet shares falling 4% after the earnings report. Analysts warn that other tech giants like Microsoft and Amazon face similar pressure as AI costs escalate.