A massive push by Big Tech to pour hundreds of billions of dollars into artificial intelligence is rattling investors, who are increasingly worried about what it means for profits — and for the survival of parts of the software industry.
Technology giants are expected to spend more than $600 billion on AI in 2026, a scale of investment that has intensified concerns about returns and capital discipline. The unease showed up clearly in markets on Friday.
Shares of Amazon slid 7% after the company disclosed plans for roughly $200 billion in capital expenditures. Alphabet fell 3% after warning earlier in the week that its capital spending could double this year. Meta Platforms also edged lower, down 1.3%.
Not all tech stocks moved in the same direction. Nvidia surged 7%, Microsoft gained 1%, and Tesla rose 4%. The broader S&P 500 climbed 1.6% and the Nasdaq added 2%, though both indexes remain on track to end the week lower.
Investors are increasingly questioning whether the AI boom has been priced too aggressively.
“The market view is that the AI build-out trade has pulled forward years of earnings expectations,” said Andrew Wells, chief investment officer at SanJac Alpha in Houston. “It’s not that the trade is over — it’s that it became too expensive without properly pricing in the risks. What we’re seeing now is de-risking.”
Nvidia CEO Jensen Huang pushed back on those concerns, saying demand for AI computing remains “sky-high.” Speaking on CNBC, he argued the surge in spending is both justified and sustainable.
While chipmakers and infrastructure providers continue to benefit, pressure has intensified on software, data, and analytics firms, which investors fear could be directly disrupted by increasingly powerful AI models.
Shares of Thomson Reuters slipped another 0.7% after suffering a record one-day drop earlier in the week. In London, RELX plunged 4.6% on Friday, capping its worst week since 2020 with losses totaling 17%.
The S&P 500 Software and Services Index has fallen nearly 8% this week, wiping out close to $1 trillion in market value since January 28.
“News that would once have driven stocks to fresh highs during peak AI optimism is now being interpreted far more cautiously,” said Carlota Estragues Lopez, equity strategist at St. James’s Place in London. “Investors aren’t just worried about returns — they’re also concerned about how narrow market leadership has become.”
The selloff was partly triggered by a new plug-in released by Anthropic’s Claude model, which renewed fears that AI systems could directly replace parts of the data-analytics value chain.
Shares of London Stock Exchange Group recovered some ground on Friday but still ended the week down nearly 8%, marking a second consecutive week of sharp losses.
The turbulence in AI-exposed stocks has spilled into global markets. World equities are on track to slip about 0.3% for the week, with the impact particularly severe in India, where software exporters lost another 2% on Friday and more than $22 billion in market value over the week.
At the same time, investors are growing less tolerant of Big Tech signaling even heavier AI spending. Alphabet shares briefly fell as much as 8% on Thursday after the company raised its investment outlook, before closing flat.
“Both Alphabet and Amazon delivered solid underlying performance, especially in cloud,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. “But that hasn’t been enough to distract markets from the sheer scale of their expanding capital investment plans.”