Google's AI spending spooks investors, wiping $500bn off value

Google parent Alphabet lost over $500 billion in market value on Thursday, sending its stock to a six-month low after revealing AI search summaries hurt ad revenue. Revenue grew 25% to $127.6 billion, boosted by Google Cloud's 103% jump, but profits fell 25% and free cash flow turned negative at over $9 billion, nearly double last quarter's loss. The spending is almost entirely for AI investments. The AI summaries reduced ad sales, which form most of Alphabet's business. Stock dropped nearly 13% Thursday, its second worst day this year, as analysts noted the difficulty of funding massive AI spending while sustaining core businesses.