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WSJ: The Week the Cracks in the AI Trade Grew Deeper
- Over the past two weeks, Alphabet, Amazon, Meta, and Microsoft outlined plans to spend more than $740 billion on AI infrastructure, sparking heavy investor selling and sharp market declines as concerns about rising debt mounted.
- According to Global Market Intelligence, these firms raised a combined $326 billion in debt this year, triple the amount raised last year, as core revenue growth slows and free cash flow turns negative.
- Alphabet reported negative free cash flow of $9.1 billion in the third quarter, while Amazon reached negative $42.4 billion over the past 12 months; Microsoft recorded $18.6 billion in positive free cash flow despite third-party capacity delays.
- The Nasdaq fell 2.9% on Thursday, while Alphabet plummeted 12%, wiping out $500 billion in market value as chip stocks tumbled broadly. Blackstone warned Anthropic might not qualify for an investment-grade rating after its IPO.
- Investors now fear mounting debt and negative cash flow, questioning whether these massive investments will generate sufficient returns. Reliance on hyperscalers to fund infrastructure suggests the AI capital crunch could stifle growth for smaller firms.
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The tech giants are losing, and it turns out: Cash is King again on the stock exchange. A world valuation of more than 2000 shares worldwide shows who is currently earning the big money. These two lists show the new cash kings.
·Berlin, Germany
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There are growing fears among investors about spending on artificial intelligence infrastructure, at a time when large technology companies continue their huge investments. Apart from the boom in artificial intelligence spending, investors seem to feel nervous about spending artificial intelligence infrastructure while major technology companies continue to invest.
Wall Street JournalReposted by 
BizToc
BizTocThe Week the Cracks in the AI Trade Grew Deeper
Intel suffers worst-ever daily decline as investors’ anxieties hit new highs
·New York, United States
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Coverage Details
Total News Sources7
Leaning Left0Leaning Right3Center3Last UpdatedBias Distribution50% Center, 50% Right
Bias Distribution
- 50% of the sources are Center, 50% of the sources lean Right
50% Right
C 50%
R 50%
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