Source: Financial Times (paywall)
Alphabet, Microsoft, and other hyperscalers are systematically redirecting capital from shareholder returns to massive capex buildouts—Alphabet alone plans ~$85B in equity offerings—treating AI infrastructure as a core competitive moat rather than an optional investment. This structural shift reduces the mechanical buyback-driven support that propped up tech valuations for the past decade, forcing investors to reprice these companies on earnings growth and deployment efficiency rather than financial engineering. The move reflects a real constraint: AI infrastructure costs are climbing so steeply that even trillion-dollar companies can't fund buildouts from organic cash flow alone without crippling shareholder payouts.