AI costs hit Meta and tech stocks as investors balk

Tech stocks fell Thursday as investors confronted rising costs for AI infrastructure, with Meta reporting its first negative free cash flow in over a decade at negative $2.12 billion for the third quarter. The selloff reflects growing concerns about uncertain returns on massive AI spending. Meta announced it will issue new non-voting Class C shares to fund AI projects and raised its annual spending forecast low end to $135 billion from $130 billion. Analysts expect higher borrowing costs will push tech firms to sell billions in stock, potentially pressuring share prices near record highs. Investors rotated into safer assets like Treasuries, while Nvidia CEO Jensen Huang cited financing bottlenecks for smaller AI companies. Bank of America noted CoreWeave may need $20 billion to meet customer commitments, fueling broader anxiety about the sustainability of AI investments.