a16z Charts Big Tech Profits Shifting to Chipmakers
a16z shares a chart showing approximate free cash flow falling for hyperscalers from $275 billion to zero while semiconductor free cash flow rises from $50 billion to $400 billion since 2022, linking it to its State of Markets II report.
Original post · 1 min read
Approximate free cash flow, from 2022 to today:
- Hyperscalers: $275B → $0
- Semiconductors: $50B → $400B
More charts in State of Markets II: a16z.news/p/state-of-markets-ii
David George @DavidGeorge83a16z.newsState of Markets II100+ Charts On The State of Markets (1H’26). It's the best. You wouldn't want to miss it.Introducing our State of Markets pt 2, along with a companion podcast where we unpack the data and discuss what comes next.
Tech is the everything cycle.
Supply: putting the buildout in context, just passed railroads as % of GDP. The wisdom of Elon is real: the factory (or the datacenter!) is the product.
Demand: diffusion is so, so early. Median AI vendor spending in the top 1% of companies is 8x that of the top 10%. Only about 30% of S&P 500 companies report a quantified AI impact, which means there’s a substantial opportunity in connecting models to a company's data and workflows. Diffus…

