Those fears might seem at odds, but as Bloomberg News reported Sunday (Feb. 15), they are both driving upheaval in the stock market.
These two worries have been percolating for months, but have become more prominent in the last two weeks, the report said. It’s led to a wave of tech selloffs, erasing more than $1 trillion from the market values of the big tech firms investing the most in AI.
“There is a contradiction when it comes to what investors are worried about when it comes to AI,” Julia Wang, the north Asia chief investment officer at Nomura International Wealth Management, said in an interview with Bloomberg Television. “Those two things can’t be true at the same time.”
According to the report, the shift marks a change in sentiment from the last few years, which saw AI stocks surge on speculation that would usher in a boom in productivity. Concerns over whether AI was a bubble had little effect on this rally.
But more recently, Bloomberg added, investors have grown tired of seeing tech spending outweigh revenues. Amazon, Meta, Microsoft and Google parent Alphabet are forecast to spend more than $600 billion on capital this year.
“This is a real no-win situation,” said Anthony Saglimbene, chief market strategist at Ameriprise Advisor Services. “Investors were comfortable saying, ‘So long as it happens in the future, I’m comfortable with Microsoft or Amazon or Alphabet spending the money.’ Now they want to know more immediately when the payback will come — and we don’t have a clear picture.”
In other AI news, recent research from PYMNTS Intelligence looks at the technology’s use in corporate settings. For example, 70% of firms already use at least one AI tool to manage cash flow, according to the PYMNTS Intelligence report “Time to Cash: A New Measure of Business Resilience.”
The research shows that roughly a third of CFOs expect high impact from agents that recommend when to hold cash, when to pay early and when to delay things.
“By monitoring cash positions and obligations in real time, agentic AI can suggest small timing adjustments that add up to meaningful liquidity gains,” PYMNTS wrote.
The research also found that 35% of CFOs expect strong impact from agents that standardize the language and presentation of accounts and intercompany transactions.
“This is especially valuable after mergers or technology switches, when inconsistent account languages can slow reporting and muddy comparisons,” PYMNTS wrote.
For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.