Technology
Senator Sanders Criticizes Big Tech’s AI Spending, Warns Companies Not to Rely on Taxpayers
Senator Bernie Sanders has warned technology companies about their increasing artificial‑intelligence spending. In recent quarters, major Silicon Valley firms—including Microsoft, Meta, Google, Amazon, SpaceX, Oracle and Nvidia—have raised their capital expenditure by billions of dollars. Wall Street has reacted negatively, wiping out more than $2 trillion in market value from the Nasdaq 100 this month as investors question whether the large AI investments will generate quick returns.
In a post on X, Sanders criticized the companies’ “high‑stakes gamble on AI,” noting that they have accumulated $3 trillion in debt. He warned, “If your AI bet fails, don’t come begging to taxpayers. You won’t be bailed out — period.”
The Nasdaq 100 has fallen more than 5.8 % in October, with hyperscalers such as Meta, Alphabet and Amazon raising their spending forecasts for AI infrastructure. Elevated benchmark interest rates are increasing concerns about the cost of servicing these capital investments, which may take years to produce significant profit margins.
Alphabet experienced its largest single‑day percentage decline on record after investors reacted to slowing growth in its core search advertising unit and a steep rise in cash burn. Meta also rattled markets with plans for a record $97.5 billion capital raise, raising fears of equity dilution.
The growing reliance on debt funding by AI companies is emerging as a new risk for investors, challenging the view that these firms are insulated from broader macroeconomic pressures. The concern is spreading into credit markets, where higher financing costs and slower returns on AI spending could squeeze companies previously seen as protected.
Microsoft and SpaceX offered some relief, with Microsoft’s quarterly results suggesting that commercial AI applications are beginning to translate into revenue gains. John Bilton, global head of strategic research for multi‑asset solutions at JPMorgan Asset Management, told Reuters that while growth may be overestimated, the companies are not operating at a loss.
Market focus now turns to next week’s earnings releases: Apple is scheduled to report its quarterly results, followed by Nvidia in mid‑November. Analysts view Nvidia’s forward guidance as a key test of whether hardware demand can withstand the cooling sentiment across the broader tech landscape.