Bangalore Investment：AI turned Big Tech stocks around. But a huge sell-off shows investors are wary of the insane spending.

Big Tech appears to be tipping into troubled territory again.

In 2022, US tech companies grappled with falling demand after aggressive expansions during the pandemic, prompting a rout in tech stocks.Bangalore Investment

However, the rush into artificial intelligence in 2023 reversed the decline, with the index gaining 40% since the start of 2023 while the tech-focused gained 60% over the same period.

Now, investors are getting impatient, with US stocks selling off amid questions about whether too much money is going to AI.

Michael Strobaek, the global CIO at Swiss private bank Lombard Odier, wrote in a report released this week that major stock markets have been driven by "investor optimism that we think borders on complacency."

"Enthusiasm for artificial intelligence has supercharged some US equities, driving the S&P 500 and Nasdaq to new highs, yet leaving performance extremely concentrated in a few mega-cap names," Strobaek wrote.Chennai Investment

This concentration makes the effect of any major decline in Big Tech stocks even more pronounced.

On Wednesday, with the Nasdaq Composite falling over 3% to mark its worst trading day since October 2022. Meanwhile, the index lost $1 trillion, according to

Among the losers were Wall Street AI chip darling which closed nearly 7% lower, and which closed 5% lower after reporting

Investors grilled Alphabet — Google's parent company — about how the company's AI initiatives were doing and their revenue-generating potential. However, Google executives provided few clues, Business Insider's .

Other Big Tech companies, including Amazon, Apple, Microsoft, and Meta, report quarterly earnings next weekMumbai Stock Exchange. After spending so much money on AI, investors will focus on what they can bring to the table in the near term.

As Jim Reid, a research strategist at Deutsche Bank, asked in a Wednesday note, "A key question to ask is how much are companies willing to spend to outpace one another in the AI race?"

Reid acknowledged that the race for the best AI model "doesn't come cheap."

Some analysts have been warning that investor euphoria over AI resembles a

As Lombard Odier's Strobaek wrote, the risk of a market reversal is growing, but since tech was the big winner up until now, it's likely that some money will rotate to other stocks and sectors.

As for Big Tech, it appears to be a case of being safe rather than being sorry — because they can afford to.

In April, Google's AI boss said the company plans to invest more than $100 billion over time in

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