Four of the largest spenders in tech have promised more than $740 billion in capital expenditure this year, nearly all of it for AI. This week the market asked, politely at first and then less so, where the money comes from. TechCrunch’s tally is stark. Alphabet fell 12% on Thursday, its worst day on record, after posting negative free cash flow of $9.1 billion for a second quarter running. Amazon’s trailing twelve-month free cash flow is minus $42.4 billion. Meta’s is negative too. Microsoft is the lone positive, and only because third-party capacity arrived late, so it spent less than planned. The Nasdaq dropped 2.9% on Friday, and the same five hyperscalers have raised $326 billion in debt this year, triple last year’s pace.
Anthropic sits at the centre of this, because its S-1 shows how many of the biggest balance sheets are bound up with it. It is customer, supplier, borrower and portfolio company to the same few giants. The Financial Times reports that Blackstone, anchor investor in a $63 billion financing for Anthropic’s chips, now expects a double-B rating: the top rung of speculative grade. Blackstone had earlier predicted investment grade before 2027. A junk rating makes the compute deals that justify the whole enterprise more expensive to fund, which is awkward for a company whose business model is to buy compute at a staggering scale.
The circularity is easy to see in the next deal along. Nvidia is weighing a residual value guarantee on Nscale’s 460-megawatt West Virginia campus, where Anthropic has signed a $44.6 billion contract for the first building. If Nscale defaults on its construction payments, Nvidia pays and takes over the site. The chipmaker is already carrying roughly $170 billion in investments and credit support to neoclouds and big customers, while CoreWeave, Nebius and IREN have each lost more than 30% this month. When the supplier cosigns the customer’s lease, the demand signal gets harder to read. None of this means the demand isn’t real. It means the financing is doing more of the work than the revenue.
Meanwhile, the plumbing keeps leaking. Northflank, a developer cloud platform, has told customers to assume every environment variable was decrypted after a breach that began Thursday, and users report their AI API keys being used without their permission. The same week brought a backdoored Claude Code extension on the Cursor marketplace. Stored AI keys are now a prime target: they are cash-equivalent, and often sit unrotated in a config file. If you run anything on Northflank, rotate everything, then check your provider’s usage logs for calls you didn’t make.
It is worth keeping a sense of proportion. A bad week for stocks does not unmake the technology; GitHub merges are up threefold in a year, and Cisco is betting its legacy code on it. But for two years the AI story was told in capability. This week it was told in cash flow and credit ratings, and those are told in a different, less forgiving language.
