What Is Cash Capex? The Cash That Leaves Before AI Hours

EXPLAINED · Mechanism · Last reviewed: 06 Oct 2026 · Next review: after Amazon Q3 2026 results (cash-capex print vs the spoken ~$220bn)

Cash capex is the cash a company spends to buy land, power, buildings, chips, servers and networking gear. The cash leaves when the kit is paid for. The hours that kit can bill arrive later — often many months later. Amazon’s own name for this line is cash capital expenditures. Other buyers report purchases of property and equipment, or capital expenditures including finance-lease principal. The labels differ. The cash still leaves first.

A simple example. Spend $1 billion of cash this year on GPU servers and a hall. That $1 billion is this year’s cash capex. It is not this year’s cloud revenue. Amazon’s 2025 shareholder letter says AWS typically lays that cash out 6–24 months before billing, depending on the component. For the buyer, see hyperscaler, explained. For the later expense, see GPU depreciation, explained.

What is cash capex?

Cash capex is a cash-flow idea, not a profit idea. You find it on the cash-flow statement, not as a single “AI” line on the income statement.

Amazon is the clearest label. Its FY2025 10-K, filed 6 February 2026, prints cash capital expenditures of $77.7 billion in 2024 and $128.3 billion in 2025, “which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network.” The free-cash-flow table matches that: purchases of property and equipment, net of proceeds from sales and incentives, $77.658 billion then $128.320 billion. Free cash flow fell from $38.219 billion to $11.194 billion. Our arithmetic: $50.662 billion more net purchases; $27.025 billion less free cash flow.

Microsoft, Meta and Alphabet print the same cash clock under different names — additions to property and equipment, capital expenditures including finance-lease principal, or capital expenditures. The table below keeps each filing’s own words. Do not add them into an “AI capex” total no issuer prints. Amazon nets vendor incentives and asset-sale proceeds. Microsoft does not. Meta folds in finance-lease principal.

How is cash capex different from depreciation?

Three clocks, in order.

The cash leaves when the servers, halls and networking gear are paid for. That is cash capex.

The expense arrives later, in slices, over the useful life the company picks. That is depreciation. See GPU depreciation. Amazon’s letter puts datacenter lives at 30+ years and chips, servers and networking at 5–6 years. A six-year life on a $1 billion cash outlay is about $167 million of expense a year, no salvage, by our straight-line arithmetic. The $1 billion of cash is already gone.

The company gets paid last, when a customer uses live capacity — usage against a remaining performance obligation, not the capex cheque. See remaining performance obligation, explained.

Microsoft’s FY2026 10-K states the bind: these investments “are in advance of fully developed revenue streams. The associated revenue may not be realized in the expected timeframes or at expected levels.” Depreciation that year was $34.3 billion, against $22.0 billion in FY2025 and $15.2 billion in FY2024. Cash additions of $115.9 billion were more than three times that year’s depreciation.

A quieter lag: purchases of property and equipment remaining in accounts payable were $26.7 billion at 30 June 2026, against $6.9 billion a year earlier. Ordered is not paid. Paid is not live.

What did the big buyers spend?

None of these filings has a line called “GPU capex.” They report technology infrastructure, servers, data centres and networking. That is where AI accelerators sit.

Amazon’s 2025 jump is 65% on our arithmetic (128.3 ÷ 77.7 − 1 = 0.651). Alphabet’s is 74% (91.4 ÷ 52.5 − 1 = 0.741). Microsoft’s FY2026 additions are 80% above FY2025 (115.948 ÷ 64.551 − 1 = 0.796). Those percentages are not a league table. Each company uses a different cash definition.

The 2026 clock mixes filed and spoken. Meta’s $115–135 billion is in the 10-K. Amazon’s letter said “approximately $200 billion in capex in 2026”; the 30 July 2026 call raised that to about $220 billion on higher memory costs — spoken, not a 10-Q line. Alphabet’s $195–205 billion is the Q2 2026 call. If Amazon’s spoken $220 billion holds, H1 cash capex of $96.3 billion leaves about $123.7 billion for the second half (220 − 96.3 = 123.7). Illustration of remaining cash, not a forecast line.

Why does cash leave years before hours?

Because the kit is not a switch. Amazon’s 2025 letter is the plain version: “AWS has to lay out cash for land, power, buildings, chips, servers, and networking gear in advance of when we can monetize it (typically 6-24 months before we start billing customers, depending on the component).” Of the AWS capex expected in 2026, “much of which will be monetized in 2027-2028,” it already had customer commitments for a substantial portion.

Faster growth means more short-term capex, and early-year free cash flow is squeezed until the first tranches bill. Amazon’s Q2 2026 results: trailing-twelve-month free cash flow was an outflow of $7.6 billion, “driven primarily by a year-over-year increase of $66.1 billion in purchases of property and equipment, net of proceeds from sales and incentives.” Trailing-twelve-month operating cash flow was still $161.4 billion. The engine is running. The kit is being paid for faster than it bills.

A remaining performance obligation is not the offsetting cash in. Amazon’s 10-Q for the quarter ended 30 June 2026 put AWS-related remaining performance obligations on contracts longer than one year at about $496 billion, weighted remaining life 6.4 years. Recognition follows usage. $496 billion is not 2026 cash. Jassy said the same day that even at approximately $220 billion of 2026 cash capex, Amazon “will still not have enough capacity to meet all the demand we have in 2026,” and that he believes 2027 will look the same. See What Does Amazon Do?.

Power is the long physical clock under the cash clock. A hall that is paid for but not energised does not bill. The chips waiting inside it are bought from the Semiconductors layer.

Who gets paid — and where is the stuck step?

Vendors are paid first. Foundries, HBM makers, server OEMs, construction and power equipment get cash on their invoices when the hyperscaler pays. Their cash does not wait for the cloud hour. Taiwan’s packaging lanes and Korea’s HBM allocation are where a lot of that cash lands; see the Taiwan and Korea doors.

The hyperscaler is paid last, as live capacity is used. A booked remaining performance obligation is a claim on future usage, not this quarter’s cash.

Lenders and lessors sit in the middle. Microsoft’s $26.7 billion of property-and-equipment still in accounts payable is a vendor-credit clock. An SPV chip leaseback, if it ever closes, is another — see who finances GPU clusters. A reported Amazon talk to move about $8 billion of already-deploying Nvidia chips into a leaseback is talks, not a 10-Q close (reported; Amazon declined to comment). $8 billion is 3.6% of a $220 billion spoken guide (8 ÷ 220 = 0.036). It does not replace the hall clock.

The stuck step is converting cash into accepted, billed hours. Cash capex can print on time while the hall is still short. Amazon’s Q2 cash capex was $53.1 billion; AWS property and equipment, net, was $263.8 billion at 30 June 2026, up from $190.1 billion at year-end 2025. Demand still exceeded installed capacity. Paying for more kit did not create spare seats.

Neoclouds run a sharper cash-then-hours sequence, with less of a stores-and-ads cushion. Once the seat is lit, their bind is often utilisation — a spare SLA seat is ready, not paid. See what a neocloud is and the Neoclouds layer. That is a different stuck step from cash that leaves before the hall exists.

Common misconceptions

• People assume capex is an expense. Actually the cash leaves on the cash-flow statement. The expense is depreciation, later. Amazon’s 2025 cash capital expenditures of $128.3 billion are not that year’s depreciation.
• People assume a remaining performance obligation funds the capex. Actually the book is usage not yet recognised. Amazon’s ~$496 billion AWS-related remaining performance obligation at 30 June 2026 has a 6.4-year weighted remaining life.
• People assume every buyer’s “capex” is the same number. Actually Amazon nets incentives and asset-sale proceeds. Meta includes finance-lease principal. Microsoft reports additions to property and equipment.
• People assume spending the cash creates billed hours this year. Actually Amazon’s letter puts 6–24 months between cash and billing, with much 2026 AWS capex monetized in 2027–2028. Jassy still said 2026 demand exceeds live capacity at ~$220 billion of cash capex.

FAQ

Related terms

• Hyperscaler — the buyers whose cash capex pulls the stack.
• GPU depreciation — the expense after the cash has left.
• Remaining performance obligation — contracted usage not yet recognised.
• Who finances GPU clusters — lenders and lessors on already-bought kit.
• Neocloud — specialist fleets where lit hours still have to be billed.

Markets and stack doors

Layers: Hyperscalers — where cash capex is the pull. Sibling layers: Semiconductors (the chips the cash buys) and Neoclouds (specialist hours after the seat is lit).

Doors: US (hyperscaler cash and halls), Taiwan (foundry and CoWoS invoices), Korea (HBM allocation).

Get the Wire — short daily notes when a cash-capex print, a spoken guide, or a hall clock moves.

Sources