By Eva Roytburg
Publication Date: 2026-01-29 17:56:00
Wall Street’s yearslong bet on AI is facing a severe test on Thursday, as investors might begin to view OpenAI—and generative AI in general—not as a catalyst for continuous growth, but as a source of systemic risk for Big Tech.
A sharp selloff in tech stocks on Thursday underscored investors’ exhaustion with the “spend now, profit later” model that has propelled the AI bull market for three years. Microsoft led the retreat, with its shares plummeting 12% by noon, erasing more than $440 billion in market value, a collapse it hasn’t seen since the pandemic. The Nasdaq was down almost 2% at time of writing.
The immediate catalyst, it seems, is an intensifying focus on capex, or capital expenditures. Microsoft revealed that its spending surged 66% to $37.5 billion in the latest quarter, even as growth in its Azure cloud business cooled slightly. Even more concerning to analysts, however, was a new disclosure that approximately 45% of the company’s $625 billion…
