The Infrastructure Debt Wave
We have entered a “Utility Paradigm” where the entry fee for the cloud elite has become so astronomically high ($600B+ total in 2026) that it precludes new challengers from ever emerging . The “Big Five” hyperscalers raised $108 billion in debt in 2025 alone to fund this build-out, with projections suggesting $1.5 trillion in total debt over the coming years. This massive capital intensity, reaching 45-57% of revenue for some players, transforms these companies into something more akin to national power grids than traditional tech firms .
Concentrated Digital Sovereignty
The scale of the 2026 spending plans - Amazon at $200B and Alphabet at $185B - is designed to secure the physical land, power, and data centers required for the next decade of computing . Amazon intends to double its power capacity by the end of 2027 to meet the insatiable demand for AI compute. This creates a “CapEx Moat” where the sheer physical and financial resources required to compete at the hyperscale level are now concentrated in only three or four global entities.
The Resilience of the Utility Model
For investors, the concern has shifted from short-term free cash flow to the risk of under-investing in this once-in-a-generation platform shift . The management of the “Big Three” argues that carrying excess capacity is safer than being unable to fulfill demand in the “Agentic Era.” As cloud services shift from being a technology disruptor to a necessary component for business competitiveness, these firms are becoming the indispensable digital utilities of the 21st century, with growth governed more by the physics of power grids than by traditional software sales cycles .