#ai-investment

#ai-investment

In a note to clients reviewed by Fortune, BofA strategists declared that "doubts around the AI revolution are emerging," with the market narrative rapidly shifting from an "upside-only" perspective to serious concerns that AI is a "double-edged sword". Chief among these new fears is the growing realization that AI might not universally boost corporate profits-it might actively destroy them. BofA highlighted several large "downside risks" that is, frankly, bumming out the AI trade.

In his final quarter as CEO of Berkshire Hathaway ( NYSE: BRK-B), Warren Buffett reallocated his technology holdings. In the process, he sold 75% of his Amazon (NASDAQ: AMZN) position, according to Bloomberg. He has held the stock since 2019. Buffett also reduced his investment in Apple ( NASDAQ: AAPL | AAPL Price Prediction), a move he has made for several quarters. Like many of the world's largest investors, Buffett does not always provide a rationale for buying or selling a stock.

More than nine in 10 (91%) private business owners surveyed in London are confident about growth in 2026, according to KPMG's annual Private Enterprise Barometer, up 4 percentage points on the UK average of 87%. The annual survey captured the perspectives of 1,500 privately owned businesses, including 164 in London, from across various industries including professional services, finance, technology, industrial manufacturing and retail.

Funding rounds of that size are no longer unusual. The surge in AI investment and the growing need for cloud capacity and data centers have pushed many companies to seek massive financing. But Oracle's recent run has been unusually volatile. Just a few months ago, its shares jumped 40% in a single day, briefly making CEO Larry Ellison the world's richest person ( ahead of Elon Musk).

Shares of the software company have tumbled roughly 29% from their November peak, reached right before Palantir last reported results, and are down more than 15% to start 2026, putting them among the 15 worst performers in the S&P 500 this year. While the selloff has cut into Palantir's valuation, shares still trade for about 142 times expected earnings, the third-highest multiple in the S&P 500. Despite its hefty price tag, Wall Street expects Palantir to report another quarter of solid growth.

The markets are a mixed bag in the first trading session of February as technology stocks reach a fork in the road. Bullish performance out of Oracle ( Nasdaq: ORCL) stock is being overshadowed by a declining Nvidia ( Nasdaq; NVDA) share price amid uncertainty around its OpenAI investment, damaging overall market sentiment to kick things off. Oracle has recaptured the spotlight as traders and investors cheer the legacy software giant's plans to pour $50 billion into AI-related capex.

As economist Dean Baker explains for the Center for Economic Policy and Research, for AI companies' current valuations to make sense, they'd need profit growth over the next five years that requires one of two things: either AI starts bringing in cash by the truckload, or profits for all the other corporations in America collapse. Both prospects seem extremely unlikely, yet the AI investments keep coming - and they seem to be dragging American workers into an economy their wages can't support.

In a recent interview with the Wall Street Journal, Jamie Dimon explained why JPMorgan Chase is spending billions more on AI. He was making a long-term bet. The same kind of leaders make when they build headquarters, factories or infrastructure that won't "pay off" this quarter but will define competitiveness for decades. It's exactly how marketers should think about and position differentiation in the eyes of the C-Suite.

"We're starting to see projects that used to take big teams now be accomplished by a single, very talented person," he said. Already this year, Meta has laid off several hundred workers mainly in its Reality Labs division, a part of the company that focuses on its "metaverse" ambitions, hardware products and AI initiatives. Zuckerberg said Meta is investing more across the company in AI tools that help employees like software engineers complete more work.

The world today is witnessing the dawn of an AI-driven intelligent revolution, Eddie Wu told a developer conference in September. Artificial general intelligence (AGI) will not only amplify human intelligence but also unlock human potential, paving the way for the arrival of artificial superintelligence (ASI). ASI, Wu said, could produce a generation of super scientists' and full-stack super engineers', who would tackle unsolved scientific and engineering problems at unimaginable speeds.

The markets are off to the races today as they round out trading for the first month of 2026. Technology stocks are in focus with several Mag 7 names on deck to report their quarterly earnings, including Apple ( Nasdaq: AAPL) and Meta Platforms ( Nasdaq: META), both of which are advancing by over 1% this morning. Small-cap stocks are relatively flat, with the Russell 2000 down fractionally. Meanwhile, precious metal gold has surpassed the $500/ounce threshold for the first time in history, sending mining stocks higher.

Marketing organizations are racing to adopt AI while simultaneously trying to contain it. About 76.6% of marketers now have AI policies in place, up from 55.3% just a year earlier, per the Association of National Advertisers' January 2026 survey (registration required). Investment is also surging. Nearly 89% plan to increase AI spending, and two-thirds would maintain that investment even during an economic downturn.

Hundreds of billions of dollars are being invested to ensure that AI succeeds, but what happens if it doesn't pay off? Massive investments by the world's biggest tech companies have fuelled growing concern about whether the AI boom can live up to expectations. With so much future revenue riding on the technology, some economists warn that reality may fall short, raising fears about the consequences for the global economy.

One good test on the AI bubble is to recognize that Nvidia has now millions of Nvidia GPUs in every cloud. We're everywhere and if you try to rent an Nvidia GPU these days, it's so incredibly hard. The spot price of rentals is going up. Not just the latest generation, but two-generation-old GPUs,

Asked point blank by Quick whether high-level AI deals were circular, with the CEO-soothing caveat that "it doesn't look like that's what [Amazon] are involved in," per Quick, Jassy said it's all about both sides seeing an opportunity to make money.

The global economy has proved more resilient than many expected in the wake of US tariff shocks, with the International Monetary Fund now projecting worldwide growth of 3.3 percent in 2026 as a surge in AI investment helps offset trade disruption. According to the IMF, the damage from higher US tariffs has so far been limited, with companies finding ways around the disruption by reshuffling supply chains and exports.

Some users call it "streamflation." Some content owners feel they don't benefit from it. The company reminds everyone of its investments in lossless audio and AI. All this swirl is about a Spotify subscription price hike charged to the top tier of Premium subscribers, who will begin to pay a dollar more per month starting soon. That one-dollar raise brings the monthly cost of Premium from $11.99 to $12.99, a 7.7% lift.

Jenny Xiao, who cofounded Leonis Capital in 2021 after a stint at OpenAI, said the current investment excitement around AI is far behind the actual research. "There is a massive disconnect between what researchers are seeing and what investors are seeing," Xiao said on the Fortune Magazine podcast this week. What's being discussed at the biggest AI conferences is as much as 3 to 5 years behind what researchers are thinking about, Xiao said.

He won't be the last executive pressed on money spent on tech and AI. The quiet concerns that started last year regarding massive AI investments are escalating into loud protests in 2026. Dimon wasn't just asking for blind faith from his shareholders. He discussed the threat posed by his peers and fintechs, and said spending on technology and AI is far more important than trying to "meet some expense target."

The soaring valuations of AI companies aren't just a bet on better software. They're a wager on who will control human labor in the future, according to Roman Yampolskiy, a University of Louisville computer science professor who was one of the first academics to warn about AI's risks. As artificial intelligence moves from tools to increasingly autonomous agents, Yampolskiy said markets are pricing in a radical shift: machines providing "free labor" at scale.

Companies across the state say rising operating costs continue to squeeze their outlook, according to the latest Associated Industries of Massachusetts Business Confidence Index. Confidence in both the state and U.S. economies has dropped more than 15 points from a year ago, even as consumer spending holds steady and business investment shows resilience. "Consumer spending has remained relatively resilient, supported by steady job growth, rising real wages in some sectors, and strong balance sheets among higher-income households," said Sara Johnson, chair of the AIM Board of Economic Advisors.

Three years after the launch of ChatGPT, value from AI investments has been slow to emerge and worries that we're in an AI bubble are growing. Yet according to responses to this year's annual AI & Data Leadership Executive Benchmark Survey, companies are undaunted. Virtually every data and AI leader participating in this year's survey believes that AI is a high priority for their organization, has plans to spend more on it, and confirms that their company is getting measurable business value from their AI investments.

2025 was unquestionably the year of AI. Big Tech shelled out roughly $400 billion on capex, a spending spree so extensive that some economists believe it staved off an overall recession. Nvidia became the first $4 trillion company. And AI content became inescapable, seeping into everything from Hollywood to campaign ads - even Mickey Mouse is getting into AI. It hasn't been an endless party. Seemingly every few weeks, the stock market gets spooked that music is about to stop.

In 2025, AI became officially unavoidable: It had been lurking in the background before, as early adapters experimented with it. But this year, companies invested more than $202 billion in AI, a 75% increase from $114 billion invested in 2024. Major tech companies fought bitterly over AI talent, offering astronomical pay packages. There was a groundswell of demand for talent, and unsurprisingly this spread to the demand for AI,

But some analysts are starting to worry about how much of that growth is concentrated in AI.A recent note from Pantheon Macroeconomics said that private fixed investment-a measure of how much companies are spending-"is rising only due to AI-related spending." Analyst Oliver Allen published a chart this morning showing that all other private fixed investment is actually in decline: "Capex intentions remain depressed, suggesting investment outside of AI-linked sectors remains weak," he told clients in a note seen by Fortune.