Tech giants pump $650 billion into AI, investors sceptical

American tech giants Alphabet (Google), Amazon, Meta, and Microsoft plan to jointly invest approximately $650 billion in new data centres and AI infrastructure, reports Bloomberg. Such an investment was virtually unheard of during previous technology hypes. As the companies ramp up their ambitions, investor unease is growing. Shares are under pressure and doubts are emerging about the pace and return on the enormous AI expenditure.

The individual investment amounts are substantial. Meta expects to spend up to $135 billion this year. Microsoft is not far behind with an estimated $105 billion. Alphabet surprised the market with an expenditure ceiling of $185 billion, while Amazon is even exceeding that with plans to spend $200 billion.

Billions invested in the AI race

These investments are intended to secure a leading position in artificial intelligence. The stakes are high: whoever dominates the market now will be able to set the tone for years to come in a sector that is still developing rapidly. However, despite the financial clout of these companies, scepticism among investors rises.

The rapid expansion of data centres and high energy consumption are also raising social and political questions. Analysts emphasise that tangible results are needed to maintain investor confidence.

Concerns among investors and financial markets

The feasibility of ambitious AI plans is increasingly being called into question. According to Simon Wiersma, investment manager at ING, investors are now less enthusiastic than before because they fear that large investments will not pay off.

This uncertainty is also affecting the broader technology sector. For example, corporate bonds issued by Dutch software and service provider Wolters Kluwer, among others, recently took a significant hit. Because the automation of legal work, which is Wolters Kluwer's core business, can now also be done by American AI company Anthropic, the Dutch company's share price fell by almost 13%. Further investments in AI are increasing concerns about the impact of artificial intelligence on data services and information providers.

For Alphabet's suppliers, including Nvidia, Broadcom and other chip suppliers, the increase in investment is actually positive, ING notes. At the same time, the bank emphasises that it is important to make selective choices within the IT sector and beyond.

Whether the AI race will ultimately lead to a breakthrough or disappointment remains uncertain. What is certain is that the scale and speed of these investments will determine the future of technology, financial markets and possibly also the crypto sector in the coming years.