America's big technology companies are investing heavily in artificial intelligence, and investors have begun to question that spending. As a result, technology shares have fallen sharply. In October, the Nasdaq fell 7.8 percent from its high, its worst monthly performance since March 2025, and its market capitalisation fell by $2 trillion, roughly equal to the market value of Elon Musk's company SpaceX.
On Friday, the Nasdaq Composite fell 2.86 percent, while the S and P 500 index fell 1.82 percent, the worst day for both indices since June. The Dow also fell 572 points, or 1.1 percent. Technology companies are spending heavily on AI, and investors fear whether there will be a return on that investment. Companies like Meta, Alphabet and Amazon are spending large sums on AI, and according to JPMorgan, global AI capital expenditure could reach $5.5 trillion by 2030, with $900 billion expected to be spent this year alone.
Intel plunges 30 percent in a day
Chipmaker Intel suffered the heaviest fall, with its shares dropping 30 percent in a single day, the biggest one-day fall for the company since 1974. The company forecast weak revenue for the fourth quarter, blaming rising memory chip prices that are reducing consumer demand. Alphabet, the parent company of Google, had also fallen heavily on Thursday.
Amazon's shares fell 1.4 percent, while Nvidia's stock dropped more than 4 percent, slipping behind Apple in market capitalisation. Alphabet and Meta shares are now down 20 percent from their peaks. Although results from Microsoft and SpaceX suggested returns on AI spending were beginning to come through, shares of both companies also fell on Friday.
Top billionaires' net worth falls
The market fall also reduced the net worth of the world's richest people. Elon Musk, the world's richest person, saw his net worth fall by $48.5 billion to $865 billion. The net worth of Jeff Bezos, Larry Page, Sergey Brin, Michael Dell, Mark Zuckerberg, Larry Ellison and Jensen Huang also fell.
