For more than a decade after the Global Financial Crisis, hyperscalers, such as Alphabet Inc. (NASDAQ:GOOGL), Meta Platforms Inc. (NASDAQ:META), Microsoft Corp. (NYSE:MSFT) and Amazon.com Inc. (NASDAQ:AMZN), perfected the asset-light model.

Cash piled up. Margins expanded. And excess capital flowed back to shareholders through aggressive buybacks and steadily rising dividends.

U.S. hyperscalers became machines of financial efficiency, generating enormous free cash flow while keeping capital intensity relatively contained.

That era is ending.

According to Goldman Sachs analysts Ben Snider and Ryan Hammond, Wall Street consensus estimates now project hyperscaler capital expenditures will reach $667 billion in 2026, up $127 billion since the start of the fourth-quarter earnings season and implying 62% year-over-year growth.

More striking than the headline number is what it represents.

Capex is now on pace to consume roughly 92% of hyperscaler cash flows from operations, a higher share than during the Dot Com Boom.

"This dynamic has dramatically reduced hyperscaler free cash flows," Goldman Sachs said.

In practical terms, nearly every dollar of internally generated cash is being reinvested back into infrastructure, primarily AI-related compute, ...