Risk is stable: cloud demand is strong, while cash outflows, debt, power constraints and China’s model competition persist.

The underlying risk picture is broadly unchanged: Amazon and Alphabet reported strong cloud growth and backlog, while their infrastructure spending continued to depress free cash flow; AI-linked borrowing and power-delayed construction remain live constraints. China’s latest model and domestic-chip developments still point to pressure on model pricing and a shift in regional compute demand, but Chinese memory shortages and policy restrictions remain important offsets.

• Amazon reported trailing-12-month free-cash-flow outflow of $42.4 billion, after a $94.8 billion increase in equipment purchases largely tied to AI.
• Alphabet reported $51.4 billion of quarterly capital expenditure, negative quarterly free cash flow and $924 billion of future purchase commitments; third-party compute use is expected to pressure cloud margins.
• Big Tech remains active in debt markets while borrowing costs rise, increasing sensitivity of the build-out to credit conditions.
• Project Jupiter illustrates that power availability can defer data-centre completion and alter the economics and contractual protections of project finance structures.

• AWS revenue grew 39% year over year to $46.0 billion and segment operating income rose to $17.8 billion, indicating current demand is converting into profitable cloud revenue.
• Google Cloud revenue rose 103% to $30.7 billion, operating income more than tripled, and Alphabet expects to recognise more than 55% of its $561 billion cloud backlog within 24 months.
• NVIDIA’s $89 billion quarterly data-centre revenue and forward outlook indicate accelerator demand remains broad, although memory limits supply.
• China’s domestic AI-chip demand exceeds Huawei’s current ability to supply it, which constrains immediate substitution for foreign infrastructure rather than proving excess capacity.

• Whether cloud backlog converts into recognised revenue and cash flow without margin concessions or slower delivery.
• Whether AI-linked debt issuance continues at wider spreads or shifts toward weaker borrower protections.
• Whether Project Jupiter power delays remain isolated or spread to tenant commitments, construction schedules or lender terms.
• Whether HBM shortages and power constraints curb infrastructure deployment outside China as well as inside it.