Wall Street is increasingly concerned as tech giants aggressively invest in artificial intelligence infrastructure. According to Bloomberg, Alphabet, Meta, and Microsoft collectively spent $78 billion on data centers and AI hardware last quarter, an 89% increase year-over-year. Microsoft alone accounted for $34.9 billion of this total, while Meta anticipates significantly higher expenditures next year. Despite claims of insatiable AI demand, analysts are skeptical about a potential AI bubble. Google reported impressive cloud growth and user adoption of its Gemini AI, while Meta’s heavy borrowing and a $16 billion tax hit caused its shares to plummet 14%. Recently, Meta secured a $27 billion financing deal with Blue Owl Capital for its $10 billion Hyperion data center project, allowing Blue Owl a majority stake. Industry leaders, including Mark Zuckerberg, caution against the risks of underinvestment as Amazon and Apple are yet to announce their AI strategies.
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