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(Reuters) – Investors appear to be losing patience with Big Tech’s prodigious Artificial Intelligence investments this week after Meta Platforms signalled deeper spending and a long road to profitability.

The concession from Meta in its quarterly report late on Wednesday cast a cloud over Microsoft  and Alphabet, which will both report quarterly earnings on Thursday amid rising AI spending.

Meta’s stock sank 15% in extended trade after it forecast higher AI spending next year, while Microsoft was down 2%, Alphabet fell 3%, and Nvidia dropped 1.4% in reaction.

Wall Street’s heavyweight tech-related companies have been locked in a fierce battle to advance generative AI, which can create text, videos, and photos from prompts and is seen as the next frontier in tech. As a result, AI spending is rising at a seemingly uncontrollable pace.

During Meta’s earnings conference call, analysts peppered CEO Mark Zuckerberg with questions about how the company was pacing its AI spending. One analyst asked whether Meta was investing more because it saw an even bigger opportunity from AI.

“I think we’ve gotten more ambitious and optimistic on AI,” Zuckerberg responded, pointing to Meta’s recent launches of new AI models. “So, all of that basically encourages me to make sure that we’re investing to stay at the leading edge of this.”

AI Spending to Increase Even More?

Alphabet and Microsoft both said earlier this year when they reported fourth-quarter results that they expected rising AI spending. The investor reaction on Wednesday indicated deepening concerns.

In a research note on Monday about Alphabet, analysts from New Street Research said the potential for materially higher capital expenditures was a worry ahead of results on Thursday.

The research firm said it now expects Alphabet’s full-year capital expenditures to be USD $45.9 billion, up from its previous estimate of USD $42.7 billion.

Google has been working to catch up in the generative AI race and released Gemini, a model that can understand and create different types of information including text, audio, and video.

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