The surge in capital expenditure from Big Tech, largely on AI data centres, chips, and cloud computing, is expected to exceed $630 billion this year, worth over 2% of GDP. However, the projected spend of more than $800 billion next year is closer to 3% of the GDP. Tech giants are using this cash to fund capex, with about 60% of their operating cash flow being used to finance capex compared to nearly 70% last year. Morgan Stanley predicts that Big Tech's cumulative capex this year and next will be around $1.4 trillion, consuming nearly 90% of expected operating cashflow of $1.,6 trillion. However investors are sceptical about the AI investment and borrowing being undertaken, which could cause financial strain on the industry. The use of leverage to finance AI projects will put additional pressure on companies' balance sheets, and may increase this pressure further if market-based interest rates continue rising. The 10-year U.S. Treasury yield is up 45 basis points this month, its biggest rise since October 2024, and this could mark the steepest monthly rise since November 2022.