• Alphabet shed around $500 billion in market value on Thursday after its stock tanked 13%.
• If the losses persist, it will be the second-largest one-day drop in market cap for any company.
• Shares of Google's parent company fell after its earnings disappointed investors.

Alphabet is on track to suffer its biggest-ever one-day market-cap wipeout, and the second-largest value drop in stock-market history.

Shares of Google's parent company slumped by as much as 13.5% in early trading on Thursday, slashing Alphabet's market capitalization by over $500 billion, from around $3.9 trillion to $3.4 trillion.

If the losses persist until the close, it would be the second-largest one-day loss of market capitalization ever. Only AI chipmaker Nvidia has lost more value in a single day, when it shed close to $600 billion on January 27, 2025, on fears that China's DeepSeek would steal its lunch.

Alphabet's shares slumped after its earnings report on Wednesday showed about $9.1 billion in negative free cash flow as it spent heavily on AI infrastructure, and profits that fell short of Wall Street's forecasts.

Google's AI search revenue also lagged expectations, despite CEO Sundar Pichai saying on the earnings call that AI helped search queries grow at the fastest year-over-year pace in five years.

Search revenue of $63 billion came in below analysts' estimates and was virtually flat compared to the previous quarter.

That came as a shock because search revenue had beaten Wall Street's estimates in each of its four previous quarterly earnings reports.

"It's worth noting that the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode," Philipp Schindler, Google's chief business officer, said on the call.

He also announced that Google is introducing ads in AI Mode to more users, including in international markets for the first time.

The rise of generative AI has shaken up Google's core business as chatbots like ChatGPT and Claude give people an alternative way to search. While Google has its own chatbot, Gemini, and has integrated it into its search engine with AI Mode, revenue is lagging behind its popularity.

"Just like our shift to mobile over a decade ago, we are focused on building the best Search user experience, followed by monetization," Pichai said.

As well as one of the market's biggest-ever single-day value losses, if Alphabet stock closes more than 9.77% lower on Thursday, it would be the company's worst post-earnings percentage drop since going public in 2004.

"In the AI trade you need a clean story to pique investor interest. But it only matters if numbers track in the right direction," Mark Shmulik, a senior analyst at Bernstein, wrote in a note.

"Is Google an AI winner? Probably, but not today."

• Elon Musk says it's "pointless" to save for the long term, as he expects "super intelligent abundance."
• The Tesla and SpaceX CEO was replying to an X user who said they'd stopped stressing about spending.
• Musk previously said that if he's right about the future, "saving for retirement will be irrelevant."

Elon Musk says it's not worth saving for the long term, as nest eggs won't matter.

"Saving money for the distant future is pointless with the advent of super intelligent abundance," Musk said in an X post on Thursday, doubling down on one of his most polarizing predictions.

The Tesla and SpaceX CEO was replying to a user who said they weren't stressing over their "questionable financial decisions" because a future of abundance meant "most of it won't matter in a few years anyway."

The world's richest person — who has a nearly $1 trillion net worth — has previously advised against saving for decades to come.

"Don't worry about squirreling money away for retirement in 10 or 20 years," Musk said during a podcast episode released in January. "It won't matter."

"If any of the things that we've said are true, saving for retirement will be irrelevant," he added.

Musk said at the time that he expects progress in AI, energy, and robotics to supercharge productivity, resulting in plentiful resources so that "anyone can have whatever stuff they want."

In that world, he continued, everyone would have access to "better medical care than anyone has today," there would be "no scarcity of goods and services," and "you can learn anything you want about anything for free."

Business Insider spoke to seven personal finance and AI experts about those comments, and they all agreed people should keep saving for retirement given the risk that Musk may be wrong.

Musk laid out an even more utopian vision on a recent podcast, predicting that advances in robotics and space travel would lead to a multiplanetary economy, at which point "money becomes irrelevant" and "conventional currency will not matter."

Several other tech leaders have predicted AI and other technologies will transform the way we live.

Microsoft cofounder Bill Gates said on a recent podcast episode that AI will lead to "true abundance" with robots able to "build houses, grow food, do surgery."

But he also warned the next two decades will be "as tumultuous a period as there's been in human history," as technological advances will mean "none of the things that human labor provides to the economy will be necessary for most goods and services."

Similarly, Musk has predicted a "bumpy" transition to a brighter future. He's suggested government checks for all as the best solution to AI-fueled job destruction.

• "The Big Short" investor Michael Burry says Anthropic's IPO filing has fueled his worries about AI.
• Burry said a dense web of AI deals has made the industry "catastrophically vulnerable."
• Writing on Substack, Burry described AI financing arrangements as "garish and audacious."

Michael Burry says Anthropic's IPO filing this week has reinforced his concerns that the entire AI ecosystem is at risk of disaster.

The investor of "The Big Short" fame wrote in a Substack post on Tuesday that the first in-depth look at Claude's parent company, ahead of what could be the biggest IPO in history, threw up a bunch of red flags.

Burry pointed to Anthropic's huge spending commitments, slowing revenue, and tangled ties.

He said that Anthropic has struck deals to buy about $537 billion of compute from the likes of Amazon, Alphabet, and Microsoft, and reached preliminary agreements worth hundreds of billions more with others such as SpaceXAI, putting its total commitments at about 12 times its current annual run-rate revenue.

"This is not stated clearly in the S-1, and in my view it is the most deserved headline from it," Burry wrote in a Tuesday Substack post.

He underscored how hyperscalers like Amazon and Alphabet act as Anthropic's "lenders, vendors, channel providers, and shareholders." He also outlined its deal with Broadcom, which involves Apollo and Blackstone and includes convertible notes and structured credit tranches.

"Just remember, the reason this is so complex is because too much debt is needed, and it must be unloaded from the balance sheets of those involved," Burry wrote.

"While some may see all the circularity and connectedness as security on the way up, and that is not wrong, it does leave the entire organism catastrophically vulnerable either on a pause or on the way down," he added.

He also described financing arrangements in the AI space as "garish and audacious," and said hyperscalers aren't generating enough cash to fund the AI buildout so they're resorting to "Byzantine" deals.

Burry said it was a "very similar" situation with vendor financing during the dot-com bubble, saying "people keep making the same mistakes with every new thing."

Burry's worries

In its filing, Anthropic said its revenue surpassed $16 billion for the first six months of this year, a 14-fold increase from the first half of 2025. Its operating loss narrowed by about two-thirds to below $700 million, and it generated nearly $4 billion in operating cash flow.

Burry initially commented on Anthropic's filing in a Substack chat thread on Monday.

He said that revenue was "slowing," citing Anthropic's claim that third-quarter revenue was 86 times the $197 million it generated in the fourth quarter of 2024, or about $16.9 billion.

That would mean Anthropic's revenue grew by about 46% between the second and third quarters of this year, after soaring 144% between the first and second quarters.

"Overall slowing of growth is not attributed to a decline in tokenmaxxing, but I did not expect that to be mentioned," Burry wrote.

Burry was referring to the trend of maximizing AI token consumption, which has fallen out of favor in recent months given its costs.

In another comment, Burry wrote that large language models (LLMs) like Claude are "improving" and "already being used more efficiently and that trend will continue, to the detriment of their growth rate."

Burry said he's focused on the complexity and fragility of the debt financing many AI deals, hurdles to installing new graphics chips shoring up demand for older chips, a potential crash in memory chip prices once the shortage eases, compression and small language models (SLMs) reducing the need for computing power, and the "fundamentals behind not just companies but the deals they are doing."

Responding to a subscriber who said that Big Tech companies are shifting from Anthropic's AI models to their own, and that tokens are rapidly being commoditized, Burry wrote: "Yes, that is what I hear."

Anthropic did not immediately respond to a request for comment on Burry's posts.

The contrarian investor shot to fame after his massive wager against the mid-2000s housing bubble was chronicled in the book and movie "The Big Short." He pivoted from running a hedge fund to writing about his personal investments on Substack last winter.

A recurring theme of his work since then has been deep skepticism of the AI boom. He's flagged slowing growth, overinvestment in microchips and data centers, aggressive accounting, hidden liabilities, and circular financing deals.

• Meta is seeking a major cash injection to fund its AI ambitions.
• The tech giant said on Monday it is looking to raise up to $95 billion from stock offerings.
• Tech firms are spending big on AI infrastructure as they try to win the superintelligence race.

Meta is tapping investors for up to $95 billion to fund its huge AI build-out.

The tech giant said in a Monday filing that it has launched about $35 billion in equity offerings, comprising around $22.5 billion of Class A common stock, and $12.5 billion in depositary shares representing preferred stock.

The parent company of Facebook, WhatsApp, and Instagram also said it was planning a $60 billion at-the-market offering once its Class C shares begin trading in the first quarter of 2027.

In an at-the-market offering, a company sells shares gradually into the market at the prevailing market price, instead of as a large block at a fixed price.

Meta said last week that it would introduce the new share class to help founder and CEO Mark Zuckerberg access the liquidity he may need to pay California's proposed wealth tax without having to sell existing shares and erode his voting control over the company.

"AI is creating significant opportunities for Meta across its core business and new products and services," the company said in a press release.

"Meta is investing to expand the infrastructure and compute capacity needed to support these opportunities and to bring personal superintelligence to billions of people and businesses," it added.

Nvidia, AMD, and Broadcom have each expressed an interest in buying up to $5 billion of the common stock being offered, but those indications aren't binding, so they might buy more or less, Meta said.

Meta stock swung during Monday's premarket from 2% in the green to 0.4% in the red.

Meta is spending heavily on AI infrastructure as it develops consumer AI products and pursues Mark Zuckerberg’s goal of "personal superintelligence."

The company said it expects to incur $135 billion to $145 billion of capital expenditures this year. It highlighted $97 billion of operating cash flow for the first nine months of this year, and the roughly $82 billion of cash and other liquid assets it held at the end of September.

Meta's revenue jumped by 26% to around $65 billion last quarter, but its operating income shrank by 37% to $13 billion as costs surged from about $31 billion to $52 billion.

• Bill Gates says AI will bring about an age of abundance in 20 years, but it'll be a rocky road.
• He predicted robots will displace human workers and "build houses, grow food, do surgery."
• Some jobs might be reserved for people, and work limits could preserve employment, Gates said.

Bill Gates says AI will create "true abundance," but the next two decades before it arrives will be "as tumultuous a period as there's been in human history."

"My big concern is this 20-year transition period, where they'll have winners and losers and a lot of disruption," the Microsoft cofounder and billionaire philanthropist said on the latest episode of the "Decoder" podcast.

Gates echoed widespread concerns about white-collar jobs, saying that telesales, telesupport, and accounting will disappear as AI will be able to do those "radically cheaper, radically faster, and even more accurately." As for blue-collar jobs, humanoid robots will take over those, he said.

"If we don't choose to massively slow down or stop, then we will have robots that can build houses, grow food, do surgery," Gates said. "And none of the things that human labor provides to the economy will be necessary for most goods and services."

He also underscored how jarring it will be for someone like him, whose vast resources have allowed him to lead the charge toward eliminating malaria and tackling other humanitarian crises.

"And when the AI says to me, 'No, I'm better than you, you go play pickleball and I'll get back to you, I'm gonna take care of this' — I mean, it's kind of humorous, but it's not humorous," he said.

Gates shared his long-held view that work is vital to giving people a sense of purpose, a way to earn an income, a reason to show up every day, an avenue to build relationships with colleagues, and a path to build things and solve problems.

He suggested that certain activities such as art, sports, cooking, and childcare could one day be reserved for humans, "even though the AI could do those things better."

Gates also highlighted that measures such as early retirement and caps on working hours could help maintain some level of human employment.

He envisioned some people saying, "Let's be like the Amish and let's only use AI for certain things," so they won't have to give up "helping each other or coming up with unique ideas."

Amazon founder Jeff Bezos and JPMorgan CEO Jamie Dimon have both proposed a shorter workweek as a less painful alternative to AI-driven unemployment.

Gates is one of several tech leaders to warn of job disruption on the road to an age of abundance.

Elon Musk has predicted a "bumpy" transition and proposed government checks for all as the best solution to AI-driven job losses. He's said that technology will drive production costs so low that everyone can have "whatever stuff they want," work will become "optional," and it's not worth saving for retirement in 10 or 20 years as money won't matter.

Similarly, Anthropic's Dario Amodei has said that AI promises to "raise the quality of life for everyone," but the "short-term shock will be unprecedented in size."

However, OpenAI's Sam Altman said in May that AI hasn't eliminated as many white-collar jobs as he expected, and he no longer anticipates a "jobs apocalypse."

Despite widespread worry about AI taking corporate jobs, and high-profile layoffs at major companies such as Amazon and Meta, national unemployment hasn't increased materially during the AI boom.

• There are clear parallels between the AI boom and the dot-com bubble, tech investor Paul Wick says.
• But solid demand, strong earnings, and less mania make for a "healthier" backdrop, Wick said.
• Seligman's chief investor brushed off Michael Burry's worries but flagged some trends to watch.

The AI boom has shades of the dot-com bubble, but fears of an imminent crash and mass unemployment are overblown, a veteran tech investor says.

At the turn of this century, there was an explosion in dot-com startups being formed, and a huge infrastructure buildout with telecoms "aggressively" spending on wired and wireless networks, Paul Wick told Business Insider in an interview this week.

The chief investor of Seligman Investments — a group within Columbia Threadneedle Investments that manages over $40 billion of assets and comprises a hedge fund, a mutual fund, and a venture capital arm — said there were clear parallels between that period and the current boom in AI startups and data-center spending. He also noted that energy prices and interest rates jumped then as they've done this year.

But Wick noted there isn't the same IPO frenzy now, or the same "frenetic environment" where stocks soar fivefold or tenfold in a day. He also said that by late 2000, a slowdown in IT spending was being forecasted for 2001, whereas enterprise spending on AI remains strong and recent tech earnings have been robust.

Simply put, the situation seems "healthier" now than in 2000, he said.

Business Insider asked Wick about Michael Burry's warnings this year around AI. "The Big Short" investor has called out aggressive accounting, circular financing, hidden debt, and overinvestment in depreciating assets like microchips as reasons to be skeptical that the boom has legs.

Wick said that Burry, known for predicting and profiting from the collapse of the mid-2000s housing bubble, has been "early or downright wrong on many other things."

Burry has previously defended his track record, citing his correct predictions and sharing charts showing the timing of his market calls.

As for concerns about Nvidia's efforts to grow the AI ecosystem by investing in data center developers and software companies, Wick emphasized that the chipmaker is "extraordinarily profitable."

He cast doubt on whether Nvidia should spend its spare cash only on buybacks, rather than bolstering its customers, especially as several of the industry's biggest players are working to develop their own AI chips to reduce their reliance on Nvidia.

But he also flagged some industry trends to watch, including enterprise clients opting to use older models or build their own, and token pricing coming under pressure as users embrace open-source models, raising questions over the size of the market opportunity for the likes of OpenAI and Anthropic.

Navigating a new world

Wick weighed in on how a young person can get ahead in the AI era.

"It used to be that a degree in computer science was a ticket to success," he said.

A better option today might be to learn a trade, as there's "booming demand" for workers such as electricians and HVAC technicians, and they can make an "incredibly good living" without having to go to a four-year college, Wick said.

He also took aim at the "doom-and-gloom notion that AI is going to eviscerate demand" for human labor. He described that worry as a "little premature" as nobody knows for sure how AI will affect entry-level roles in the future, unemployment is yet to soar, and there's always inertia when it comes to businesses and consumers changing their behavior.