Microsoft’s stock plunged 10% on Thursday, wiping out $360 billion in market value, after the tech giant reported a 66% surge in data center spending, reigniting investor concerns about the sustainability of the artificial intelligence (AI) investment boom.
The company’s capital expenditure (capex) reached $37.5 billion in the quarter ended December 2025, two-thirds of which was allocated to data centers. Despite beating earnings and revenue expectations, Microsoft’s cloud growth came in below forecasts, and investors reacted sharply, sending the company’s market capitalization down to $3.2 trillion.
The selloff rippled across the broader market. The Nasdaq Composite fell as much as 2.6% in early trading before closing down about 0.7%, while the S&P 500 slipped roughly 0.1%. The Dow Jones Industrial Average ended the day nearly flat.
Other Tech Giants’ Moves
Amazon, which also saw its shares go down 0.41%, is also pouring resources into AI infrastructure. Oracle, which recently signed a $300 billion data center deal with OpenAI, saw its shares fall 3.34% amid concerns over its $50 billion AI-related spending. Alphabet, Google’s parent company, is expected to follow suit with increased AI investments, going down 1.59% today.
According to Gartner, global AI spending is projected to hit $2.5 trillion in 2026, up 44% year over year, with further growth expected in 2027.
OpenAI’s Mega-Funding Round
Adding to the sector’s buzz, reports emerged that OpenAI is in talks to raise up to $60 billion in a new funding round, with Nvidia, Microsoft, and Amazon reportedly leading the investment. The round could value OpenAI at as much as $830 billion, but it has also raised concerns about a “circular financing” model, where the same companies that provide infrastructure also fund the AI startups that use it.
Investor Sentiment and Economic Backdrop
Billions are being poured into data centers, chips, and infrastructure, but the real-world impact for consumers remains zero. The promises of AI revolutionizing healthcare, education, and daily life have so far been overshadowed by opaque business models, speculative valuations, and a relentless race for dominance rather than innovation that truly serves the public.
Investors are now questioning whether this feverish spending will ever translate into meaningful returns—either financial or societal. For the general population, the “AI revolution” still feels like a distant, exclusive club for tech insiders and Wall Street. The gap between the hype and the actual utility of AI for everyday life continues to widen, raising the uncomfortable question: are we funding a future that will benefit only a handful, while the rest are left to wonder what all the fuss is about?
