AI Spending Fears Haunt Stock Markets

Artificial intelligence (AI) just isn’t getting the market excited like it used to.

Microsoft and Nvidia shares fell ahead of the chipmaker’s earnings. (Photo: QSO4YOU.com [DE] Flickr

A flurry of AI announcements didn’t stop the stock selloff, but don’t bet on Big Tech companies backing away from their investments while private money continues to flow in, Adam Clark reported for Barron’s Daily.

A big deal like the one struck between Anthropic, Microsoft, and Nvidia—through which the AI startup will receive investment from the software giant and chipmaker while spending tens of billions on cloud computing—would have sent stocks soaring just a few weeks back.

But investors appear increasingly skeptical of how such circular arrangements will play out.

Microsoft and Nvidia shares fell ahead of the chipmaker’s earnings, which arrive after the close at one point last week.

The AI rally is clearly a source of concern. About 45% of fund managers surveyed by Bank of America in November listed an AI bubble as their top tail risk for markets—but 54% also said being invested in the Magnificent Seven stocks was the most crowded trade.

So, will any of the tech companies blink? Google CEO Sundar Pichai sounded cautious when he said the industry might “overshoot,” speaking in a recent BBC interview.

But he also hailed the launch of his company’s Gemini 3 AI model as “a new era of intelligence.” Ultimately, defending Google’s dominant position in search takes precedence over saving money.