Meta Platforms' AI Spending Triggers Massive Capex and Free‑Cash‑Flow Decline

Meta Platforms reported Q2 2026 revenue of $60.8 billion, but free cash flow fell 91 % to $784 million as the company spent $31 billion on AI infrastructure, driving total expenses up 55 % to $42 billion and incurring a $2.4 billion legal charge. CEO Mark Zuckerberg defended the outlay, noting the launch of the Muse Spark 1.1 model and an API business priced at roughly one‑quarter of rivals' rates.

Analysts warn that the same AI‑driven capital‑expenditure surge is affecting other leading tech firms. The top five global technology companies, including Alphabet (Google) and Amazon, are projected to post negative free‑cash‑flow in the coming year as they expand data‑center capacity for large‑language‑model training and inference. The scale of hardware investment is outpacing cloud revenue growth, prompting a shift toward more efficient, distilled model architectures.