Overview
- Software and data names slid hard, with the S&P software and services index down about 8% for the week and roughly $1 trillion in value erased since January 28 as investors reassessed AI’s impact and timing.
- Alphabet, Amazon, Microsoft and Meta outlined 2026 AI capex approaching $600–$700 billion—Amazon near $200 billion and Alphabet signaling a potential doubling—raising concerns over cash flow, margins and greater reliance on debt.
- Nvidia CEO Jensen Huang defended the surge as sustainable given demand, even as hyperscalers accelerate alternatives including Google’s Ironwood TPUs, Amazon’s Trainium3, Microsoft’s in‑house chips and OpenAI’s reported Broadcom project.
- Anthropic’s new Claude add‑ons, including Claude Code and Cowork, stoked fears that AI could substitute for categories of software, contributing to a sharp sector selloff and a rotation toward value‑oriented stocks.
- The infrastructure push faces tangible constraints, with data‑center electricity needs projected to exceed 600 terawatt hours by 2030 and U.S. tariffs plus labor shortages adding cost and delay, even as utilities draw investor interest.