Planned artificial intelligence investments of nearly $600 billion by major technology companies in 2026 are fuelling fresh anxiety among investors, who are increasingly questioning the impact of such heavy spending on profits and the broader tech ecosystem.

Shares of Amazon fell sharply in pre-market trading on Friday after the company said its capital expenditure could double compared with last year, highlighting the scale of investment being directed toward AI infrastructure. While some other big tech stocks edged higher and Wall Street futures firmed, sentiment across the sector remained fragile.

Pressure on Software and Data Firms

Beyond the largest technology companies, the sell-off has been particularly severe for software, data, and analytics firms, which investors fear could face an existential threat from increasingly powerful AI models.

Shares of London-listed RELX dropped 4.8% on Friday and are on track for a 17% weekly decline, their worst performance since 2020. The S&P 500 software and services index has fallen nearly 10% this week, while India’s IT index has slid about 7%, reflecting the global nature of the downturn.

‘Magnificent Seven’ Under Scrutiny

Members of the so-called “Magnificent Seven,” including Alphabet and Amazon, revealed plans this week to spend far more than expected on AI. While analysts note that these companies remain highly profitable and have the financial capacity to absorb higher costs, investors have reacted cautiously, pushing share prices lower.

“Headlines that once would have driven stocks to new highs during peak AI optimism are now being interpreted far more carefully,” said Carlota Estragues Lopez, equity strategist at St. James’s Place in London. “Investors are worried not just about returns on investment, but also about narrow market leadership dominated by a handful of mega-cap names.”

New AI Tools Trigger Market Fears

Selling pressure intensified after the release of a new AI plug-in from Anthropic’s Claude, raising concerns that advanced AI systems could disrupt traditional software and analytics businesses. Shares of London Stock Exchange Group recovered slightly on Friday but remained nearly 6% lower for the week, marking a second consecutive week of steep losses.

This pullback in AI-linked stocks has weighed heavily on broader equity markets.

Global Markets Slide

Global equities are heading for their worst week since November, down about 1.6% overall. The S&P 500 is off nearly 2%, while U.S. software and data services firms have collectively lost around $1 trillion in market value since January 28.

The sell-off has been particularly sharp in India, where software exporters fell another 2% on Friday, bringing total losses for the week to about $22.5 billion.

Spending vs. Profits Debate

Investor concerns about AI-driven disruption are colliding with a growing tendency to penalise big tech firms for signalling even heavier spending on AI. Alphabet raised its investment outlook on Thursday, sending its shares down as much as 8% intraday, although the stock later recovered to close flat. Alphabet shares were little changed in pre-market trading on Friday.

“Both Alphabet and Amazon reported strong underlying business performance, driven by better-than-expected growth in cloud services,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. “But that has not been enough to distract investors from the sheer scale of their expanding capital investment plans.”

As markets reassess the cost and consequences of the AI boom, big tech’s spending ambitions are increasingly being viewed as a risk rather than a rallying point.