Google's parent company, Alphabet, experienced an over 8% stock decline, losing more than $200 billion in market value as it announced plans to significantly increase AI-related spending to $75 billion by 2025. This surge in investment comes despite an overall slowdown in revenue growth, compared to prior quarters. Critics like D.A. Davidson's Gil Luria express substantial concern regarding the trend and its potential impact on investor confidence. CEO Sundar Pichai defended the spending, emphasizing that reduced operational costs in AI could unlock broader applications in the future.
"If this is the new trend for Alphabet, then investors should be worried," said D.A. Davidson analyst Gil Luria.
"The cost of actually using [artificial intelligence] is going to keep coming down, which will make more use cases feasible," Pichai added.
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