Big Tech's $62 Billion AI Spending Fuels Pick-and-Shovel Bets
Investments by Alphabet, Amazon.com and others may take years to pay off. Skeptics worry about a bubble.
Illustration: Chloe Niclas for Bloomberg Markets
In the two years since ChatGPT burst onto the scene, artificial intelligence has come to dominate investor consciousness more than any other technological breakthrough in the past two decades. Tech giants are spending tens of billions of dollars per quarter to beef up the computing power needed to develop and run AI systems.
To its biggest boosters, the impact will be astonishing: AI will replace legions of workers, help researchers discover lifesaving drugs, enable companies to push into new markets and unleash vast efficiencies that will juice corporate profits for years to come. As a result, AI-related stocks have been responsible for much of the bull market that began in October 2022.