US Tech Stocks See Sharp Declines Amid Rising Costs of AI Build-Out

Shares across the technology sector continued to slide on Friday, as investor anxiety grew over the increasing financial demands of building out artificial intelligence infrastructure. The Nasdaq opened at its lowest level in more than two months, falling 2.5%, with other major tech companies like Reddit and Roblox also experiencing losses. Intel shares saw a significant drop, falling as much as 30% in early trading. The chip maker's decline followed a warning from the company regarding a weakening personal computer market, even as it simultaneously announced plans to increase its investment in AI. Intel is on track to lose more than $130 billion in value following its recent earnings update. During the third quarter earnings report, Intel Finance Chief David Zinsner stated that the firm did not anticipate positive cash flow this year and forecasted lower-than-expected revenue for the fourth quarter. Zinsner attributed the outlook to a continued slowdown in the PC market, noting that the company expects this trend to persist through the first half of next year. He also confirmed that the firm had significantly ramped up equipment investments in the third quarter and expected these expenditures to be even more substantial in the following three months. Other major tech firms also faced investor scrutiny. Amazon shares fell as much as 6% before recovering after its reported earnings on Thursday failed to meet market expectations. Meanwhile, Alphabet, the owner of Google, saw its stock plunge by over $500 billion on Thursday after it disclosed that its AI summaries were negatively impacting its core search advertising revenue.