Daily AI Briefing

AI spending spree faces a market reckoning

Investors are selling off major technology stocks as they question whether enormous artificial-intelligence investments will deliver returns quickly enough. Amazon, Alphabet, Microsoft and Meta expect to spend more than $720 billion this year on data centers and other infrastructure, about triple their spending two years ago, according to The New York Times’s analysis of the buildout.

The sell-off has erased nearly $500 billion from Alphabet’s market value in a day, as slowing search growth and rising costs added to concerns, The Wall Street Journal reported. Amazon CEO Andy Jassy defended the spending, forecasting AWS could reach $1 trillion in annual revenue within five to 10 years, TechCrunch reported. The Nasdaq fell more than 2% Friday, while energy, utilities and consumer staples helped limit broader market losses, The New York Times reported. Investors’ scrutiny of Big Tech’s spending has intensified, DealBook noted.

Anthropic’s IPO spotlights the cost of AI’s buildout

Anthropic has filed to go public, reporting $16.3 billion in first-half revenue and an $80.7 billion net loss, according to Transformer AI’s account of the filing. A New York Times opinion essay says the company has also committed roughly $800 billion over multiple decades to chips, cloud services and data centers, and cites a projected valuation of $1.5 trillion to $2 trillion in its analysis of the filing.

The figures underscore the scale and expense of the race to expand AI computing. That buildout is also drawing political scrutiny: campaigns are linking data centers to concerns about jobs and electricity costs, though AI remains a relatively minor issue for most voters, Transformer reports in its midterm analysis.

AI shopping agents remain marginal as companies build their own

Amazon and DoorDash say third-party AI shopping agents have yet to make a significant mark on ordering, even as both companies develop their own tools. Amazon CEO Andy Jassy said external agents are not meaningfully affecting its advertising business; the company says Alexa for Shopping reached more than 400 million customers over the past year, according to the Wall Street Journal. DoorDash reported “several hundred” orders from outside agents, compared with about 3 million deliveries a day, and said most customers still use its app, TechCrunch reported. The gap highlights the challenge of turning AI investment into widespread use and returns, a concern for investors as companies spend heavily on the technology.