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Payments firm Ramp reports that while AI token usage kept rising, actual spending on AI services grew just 1.5% combined across August and September, down sharply from 42% growth in July alone. Ramp's lead economist Ara Kharazian said the slowdown is concentrated among the top 1% of spenders, who have dipped slightly below the roughly $10,000-per-employee monthly spending they hit over the summer.
A tech newsletter roundup notes growing unease among investors over heavy AI spending, alongside other items including Anthropic's claimed $40 trillion market opportunity, early impressions of Apple's first touch-screen MacBook, and Silicon Valley firms pursuing Pentagon explosives contracts.
Alphabet shed roughly $500 billion in market capitalization as investor unease grew over the scale of Silicon Valley's AI-related spending. The decline reflects a broader pullback in tech stocks tied to artificial intelligence investment.
US technology stocks fell for a second straight day, with the Nasdaq down over 3.5%, Intel shares plunging as much as 30%, and Reddit dropping 26%. Alphabet extended losses after losing more than $500 billion in market value the previous day, as combined 2026 AI spending commitments from Meta, Alphabet, Oracle, Amazon and Microsoft reach $800.6 billion.
US tech stocks fell sharply, with Intel dropping as much as 30% after warning of a weaker PC market even as it boosts AI spending, and losing over $130bn in value. Amazon shares slid up to 6% following earnings that missed expectations, while Alphabet continued falling after a $500bn plunge the previous day tied to AI summaries hurting search ad revenue. The Nasdaq opened at its lowest level in over two months, down 2.5%, with Reddit and Roblox also declining.
Shares of Intel, Reddit and Amazon dropped as investors reacted to heavy AI infrastructure spending and signs that AI-driven search tools are cutting into traditional web traffic. The sell-off hit multiple major tech names on the same trading day, reflecting broader unease about AI-related costs and revenue risks.
Alphabet's stock dropped significantly on October 29, pulling the Nasdaq down with it, after third-quarter earnings showed Google Services revenue of $96.3 billion, below Wall Street's $98.5 billion estimate. Search revenue growth slowed to 12% year over year, down from 17% in Q2 and 19% in Q1, while operating expenses rose and free cash flow turned negative as the company increases spending on data centers and AI models.
Alphabet's third-quarter revenue rose nearly 25% year-over-year to $127.6 billion but fell short of the $128.2 billion analysts expected, while adjusted earnings per share dropped 7% to $2.67 versus the $3.02 consensus. Google Cloud was a bright spot, with revenue doubling to $30.71 billion and operating income more than tripling to $11.12 billion, and the Gemini app surpassed 1 billion monthly active users. Shares fell nearly 10% in after-hours trading following the report.
Gartner's HR Symposium data shows just 3% of organizations exceeded their cost-cutting targets from AI-driven productivity gains, while 97% failed to achieve savings through productivity alone. Despite this, nearly 40% of companies are already over budget on AI spending, and 85% say they intend to increase that spending next year. Gartner analyst CV Viverito said AI's real value lies in enabling new capabilities rather than cutting costs.
Microsoft has extended a voluntary exit offer to roughly 60,000 employees at level 70 and below in the US, Canada, India and the UK, according to sources cited by CNBC. The program expands on a smaller buyout round launched in April, which Microsoft called its first Voluntary Retirement Program in 51 years, and includes financial support and job-placement assistance. The eligible group represents about 27% of Microsoft's 228,000 global employees as of June 2025.
Apollo Global Management's chief economist Torsten Slok reported on October 24 that revenue per worker and profit margins are climbing for the Magnificent Seven tech stocks while staying flat across the other 493 S&P 500 companies. Slok said heavy AI investment has produced no measurable productivity gains outside the tech sector, with many firms now treating AI token spending as a cost rather than a growth driver.
Meta continues to pour significant capital into artificial intelligence development and infrastructure, according to a roundup of recent tech coverage. The same coverage also touches on a budget EV's road trip performance, Demis Hassabis's AI ambitions, and a review of an iPhone accessory.