Big Tech's Data Center Spending Spree Rattles Wall Street

Amazon, Microsoft, Google, and Meta are on track to spend over $720 billion on data centers and capital expenses this year, roughly triple their spending from two years ago, as they race to build artificial intelligence infrastructure. Most of these companies are now spending more cash on data centers than they generate from their core businesses, forcing them to take out loans and sell stock to fund the ambitions. The heavy spending has unsettled investors, triggering a tech stock sell-off, with the Nasdaq dropping over 2 percent on Friday. Google’s stock fell more than 12 percent after underwhelming results, while Amazon’s shares traded down following its report, and Meta’s shares dropped 7 percent last week after it issued new stock to raise funds. Analysts warn of several more years of uncertainty, as returns on these investments may take years to materialize.