U.S. technology giants are spending heavily on artificial intelligence, raising concerns about economic risk.

Over the past decade, these companies built cash reserves from digital products such as search, social media and cloud services, making them staple holdings in investment portfolios. Now they are directing most of their earnings toward AI development, which requires costly data centers, chips and infrastructure.

Financial results show that for every dollar of revenue generated in the last quarter, Google spent $1.15 on AI‑related capital expenditures. Analysts project that Google, Amazon, Microsoft, Meta and Oracle will have negative free cash flow next year, according to S&P Global Market Intelligence.

The AI spending has coincided with a summer sell‑off in the stock market, as investors worry about an AI bubble. Companies have raised prices for smartphones, laptops and other consumer goods, contributing to higher inflation. Energy demand from data centers has also increased household electricity bills in some regions, according to economists.

Investment analysts warn that the scale of the spending may be unsustainable. Christopher Wood of Jefferies said he is uncertain whether the AI bets will generate profits. Barbara Denham of Oxford Economics found that the AI boom is benefiting already prosperous metropolitan areas, reinforcing existing wealth gaps.

White House spokesman Kush Desai said the administration is supporting domestic chip manufacturing to secure supplies for electronics. The Bank for International Settlements has warned that a failure of the AI boom could trigger economy‑wide recessions. The ultimate payoff of the AI investment remains uncertain, and its impact on workers and communities is still unknown.