AI Forces Big Tech to Spend More Than It Earns, Causing Wall Street Concern

Summary

Alphabet experienced its most profitable quarter in history, reporting $112 billion in profit, largely due to unrealized gains from SpaceX and Anthropic stakes. Despite strong cloud computing growth, investors reacted negatively, sending shares down nearly 7%, as the company became cash flow negative for the first time due to massive AI investments and warned of significantly higher capital expenditures.