Tech Giants' AI Spending Sparks Investor Concerns

Big tech companies are throwing tons of money at AI, but investors are starting to have doubts. This became clear when Meta and Microsoft, two major players in the AI game, saw their stock prices take a hit after their latest earnings reports. Meta announced plans to spend between $70 billion and $72 billion on AI next year, which is a lot more than they had initially planned. Their stock dropped by as much as 14% the following day. Microsoft also revealed that they had spent a record $34. 9 billion on AI in the last quarter alone, and they might spend even more in the future. Their stock fell by 3%. Investors are getting nervous about all this AI spending. They're worried that the market might be in a bubble, especially since it's not clear how these companies will actually make money from AI. Some experts are drawing parallels to past tech trends that didn't pan out, like Meta's big push into the metaverse. Peter Berezin, a market strategist, sees this as a warning sign. He thinks that if more tech companies announce big spending plans and their stocks drop as a result, it could mean that the hype around AI is starting to fade. He warns that if these companies don't see the best-case scenario for AI, they could end up with significant losses. This is a big deal because companies like Amazon, Meta, Microsoft, and Google could spend up to $320 billion on AI this year alone. Investors are watching closely to see if this spending will pay off or if it's just another tech fad.