5 yr
server life 5 yr · peak drag 2027–2028
Capex today, depreciation tomorrow: the D&A wave lands on 2027-2029 income statements Capex cash is capitalized into a balance-sheet PP&E reservoir, then drained as annual depreciation onto each year's income statement; the accumulated wave lands on 2027-2029 as a non-cash drag on reported earnings. PP&E on the balance sheet servers & networking ~5–6 yr book life buildings & land ~25–40 yr book life economic life shorter than book Capex now cash out today capitalized, not expensed
accrues yearly independent of AI revenue the D&A wave lands 2027–2029 a fraction of the build-out 2025 2026 2027 2028 2029 non-cash: reduces reported earnings · added back in operating cash flow