This article first appeared on GuruFocus.

Wall Street is beginning to flinch at the cost of the AI revolution. Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Meta Platforms (NASDAQ:META) together poured $78 billion into AI infrastructure last quarteran 89% surge from a year earlier. Most of that spending went into new data centers and GPUs as the companies chase dominance in artificial intelligence. Yet instead of cheers, investors met the numbers with caution. Microsoft and Meta shares fell in after-hours trading following their results, while Alphabet’s stock climbed more than 6% after stronger-than-expected growth in Google Cloud. Analysts are now openly questioning whether this pace of spending signals long-term convictionor the early stages of an AI bubble.

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Microsoft’s CFO Amy Hood said the company still cannot meet surging demand for AI services despite a record $34.9 billion in quarterly capital expenditures. Azure’s revenue growth remained steady, not faster, which left some investors wondering how soon those massive outlays will translate into higher returns. Alphabet, by contrast, projected confidence. CFO Anat Ashkenazi said the Gemini AI assistant now counts 650 million monthly active usersup 44% in three monthswhile Google Cloud revenue rose 34% to $15.2 billion, exceeding expectations. The company lifted its annual capex forecast to $93 billion and expects a significant increase again next year.

Meta offered the most unsettling tone. Alongside a $16 billion tax charge, it warned that spending will accelerate sharply through 2026, even as its Reality Labs division lost $4.4 billion last quarter on $470 million in sales. Without a cloud business to rent out excess capacity, Meta’s payoff depends on using AI to boost ad targeting and power new products like smart glasses. CEO Mark Zuckerberg told investors that spending more now could be the safer path, arguing that the bigger risk lies in underinvesting. For now, Big Tech’s AI gamble sits at an inflection pointone where scale could define the next decade, or where exuberance could test the market’s faith in this trillion-dollar story.