#hyperscalers

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.

Semis ripped in the first half of 2026 and then late June cracked. The honest answer is that AI demand is real and Nvidia is no longer the trade. Those two sentences are not a contradiction, and most coverage refuses to hold both.

A huge slice of Nvidia's revenue comes from a handful of customers. In the July 2025 quarter, two anonymous buyers alone were 39% of sales. The entire AI trade is a few CFOs' capex decisions away from a bad quarter.

Amazon, Google, Meta, and Microsoft guided to roughly $725 billion of 2026 capex, up 77% in a year. Some of them show you the revenue on the other side of the spend. Some of them call ROI 'a very technical question' and change the subject. The earnings call is where the tell shows up.