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A sector-wide reassessment of artificial intelligence spending arrived in equity markets after earnings reports delivered an unwelcome message: two of the world's most closely watched technology companies intend to spend more on AI, not less.
Tesla and Alphabet both shed hundreds of billions in combined market value in the sessions following their results.
Each had signaled higher capital expenditure as part of its AI investment program, and the market's reaction was immediate and steep.
The capex signal investors punished Against the backdrop of a technology spending cycle already under close scrutiny, markets had been watching for any sign of cost discipline from the sector's largest spenders.
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