Not-yet-started leases vs cash capex

Our read: the AI build is adding more in not-yet-started leases than in cash spending ($297.1bn vs $181.5bn), and most capex charts only show the cash.

The five big cloud spenders' not-yet-started leases rose $297.1bn across their latest filings. Their cash capex in calendar Q2 was $181.5bn. That's 1.64x (our calc; $ORCL's lease figure runs to Aug 31, its capex to May 31).

The total now stands at $1,118.5bn, up from $821.4bn: $MSFT $329.1bn, $ORCL $288.0bn, $META $279.0bn, $AMZN $137.2bn, $GOOGL $85.2bn.

Meanwhile, their combined free cash flow in Q2 was $4.8bn. Cash capex ate 97.4% of operating cash flow (our calc).

Our read: a growing share of the build is being committed through leases, not paid for up front.

The caveat matters: the lease figures are undiscounted payments over terms of up to 30 years, while capex is one quarter of cash. So the ratio shows scale, not a like-for-like cost. Definitions also vary: $META's figure includes finance leases.

Either makes this a timing story, not a build moving off the balance sheet.

What would prove us wrong

Set before publication. We report back in public when one trips.

• The Q3 10-Qs (late October) show the not-started total flat or down, meaning commitments are converting, not stacking. Open · next check: Q3 10-Qs (late Oct; $ORCL in Dec)
• Leases commencing show up as a step-up in lease assets and liabilities with no new signings. Open · next check: Q3 10-Qs (late Oct; $ORCL in Dec)

Method and sources

Figures marked "our calc" are our own arithmetic on the cited primary sources (company filings, earnings releases, public datasets). Every figure was checked against its source before publication.

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General research, the same for every reader. Not investment advice.