What does it mean to turn negative free cash flow? These companies will have to start borrowing heavily, issuing corporate bonds, and even increase capital to support AI infrastructure investment. Credit risk will gradually increase. Alphabet has already led this—almost $50 billion in equity financing plus $100 billion in debt raising. When the arms race of AI forced the world's most profitable group of companies from cash cow to borrowers, the whole valuation framework of technology stocks was being rewritten.
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