Cost concerns over the AI boom intensify; Amazon and Intel plunge after hours

According to Reuters, after the U.S. stock market closed on Thursday, concerns over the costs of the AI boom intensified further. Earnings reports from Amazon and Intel indicate that the race to build AI infrastructure is not only putting pressure on tech companies, but is also starting to weigh on consumers. Amazon's stock fell about 7% after hours, while Intel plunged around 18% after hours. In addition, the selling wave quickly spread beyond these two companies. AI cloud service providers CoreWeave, Nebius and Iren each saw after-hours declines of around 6% to 7%. Large technology companies are undergoing broader shifts in how they finance their expenditures. Massive investments in data centers have turned previously low-debt companies into major borrowers. Both Alphabet and Meta posted net cash outflows in the September quarter. Microsoft is the only company in this group that has not burned cash, but it also launched a $25 billion bond issue on Thursday. While tech giants can still sustain this level of spending, investors have become increasingly cautious regarding smaller AI cloud companies that are borrowing heavily to fulfill large backlogs of orders.