#ai-capex

Hyperscalers depreciate AI servers over five to six years. If the real economic life is shorter, reported profits across Big Tech are too high. Here is how depreciation actually works, what the bears get right, what they get wrong, and how to check the assumption yourself in a 10-K.

Amazon raised at least $25 billion in the bond market to fund AI infrastructure, on top of the $54 billion it already borrowed in March. Hyperscalers used to pay for capex out of cash flow. Now they issue debt, and fixed coupons meet uncertain AI revenue.

The S&P 500 gained 9.6% in the first half of 2026 while the Magnificent Seven, a third of the index, went up 2.6%. That gap is the whole story, and most recaps skip right past it.