Alphabet and Tesla kicked off tech earnings season on Wednesday, reporting better-than-expected revenue but negative free cash flow for the latest quarter, with both companies telling investors to prepare for higher capital expenditures. The reports triggered an after-market selloff, with Tesla shares sliding 4% and Alphabet down more than 3%. Alphabet forecast capex for this year of $195 billion to $205 billion and warned of higher numbers in 2027, up from prior guidance of $180 billion to $190 billion. Tesla reiterated expectations for more than $25 billion in capex this year. Mizuho analysts noted that Google’s capex increase was “broadly anticipated” and that cloud revenue jumped 82% from a year earlier, blowing past estimates. The recent emergence of cheaper open-source models, largely out of China, along with signs that corporate America is getting more frugal on AI services, has raised concerns about future returns on investment. Meta and Microsoft are scheduled to report next Wednesday, followed by Amazon and Apple.