Tech stocks set to wipe out $1 trillion in value as concerns about the AI boom deepen

Tech stocks plunged on Friday morning, putting the Nasdaq 100 index on course for a more than $1 trillion drop when the opening bell rings at 9:30 am ET in New York.

Leading the declines were shares of Amazon, which fell 7%, and Intel, which plunged 26%. Both companies reported quarterly earnings this week that failed to reassure investors and analysts.

Futures that track the broader S&P 500 also dropped sharply by more than 1.1%.

As trillion-dollar tech companies raise and spend hundreds of billions of dollars to build massive artificial intelligence data centers and develop AI models, investors have been on edge as they look for clear signs that all this spending is actually delivering returns.

On Thursday, Amazon reported that its spending to build out AI had continued at a faster clip than expected last quarter, while growth in its core online shopping business had slowed.

The last time Amazon told investors it was upping it’s AI spending budget, the market rewarded the decision by sending shares up more than 15%.

But a lot has changed in the past three months. Some of the big companies that pay to use AI models have tightened their token budgets. Others…

Original source: https://www.nbcnews.com/business