Major technology giants are pouring record amounts of capital into artificial intelligence, with combined spending on AI projects reaching $725 billion. This massive investment is causing cash reserves to shrink, with Amazon expected to spend more than it earns this year, while Meta and Microsoft may also burn cash. Google's parent company, Alphabet, will see its cash flow dip to its lowest level in over a decade.
Despite these financial pressures, experts suggest this spending will persist even during economic downturns. History shows that monopolies like Ma Bell continued investing in technology during difficult times to survive industry changes. Similarly, tech leaders plan to spend around $700 billion on AI by 2025, viewing it as essential for future growth and efficiency.
Investors are weighing options among the top players. Keithen Drury from The Motley Fool argues that Microsoft is a better bargain than Alphabet, noting that while Alphabet's Google Cloud revenue jumped 63% compared to Microsoft's Azure growth of 40%, Microsoft's stock trades near decade lows. Cathie Wood also ranks Amazon as a top pick, highlighting its AWS platform and services like the Alexa virtual assistant.
Alphabet is on track to become the world's largest company by market value, surpassing Nvidia. The company's acquisition of DeepMind in 2014 helped establish its AI leadership, and it recently invested $375 million in AI chip maker Cerebras Systems. Meanwhile, BlackRock CEO Larry Fink predicts AI shortages could create a new trillion-dollar asset class as companies buy contracts to guarantee future computing power.
Supply chain partners are also benefiting from this boom. Coherent Corp. confirmed a multi-billion dollar collaboration with NVIDIA to support AI data centers, projecting revenue could reach $12 billion by 2029. However, risks remain, including a recent incident where a fraud site built with AI code from Cursor leaked 345,000 stolen credit cards, prompting warnings to test AI-generated code carefully.
Key Takeaways
['Major tech companies have spent a record $725 billion on AI projects, causing significant cash flow reductions.', 'Microsoft is viewed as a better investment bargain than Alphabet because its stock trades near decade lows despite slower cloud growth.', "Alphabet is projected to become the world's largest company by market value after surpassing Nvidia.", 'Amazon is highlighted as a top AI stock pick by Cathie Wood due to its AWS platform and Alexa services.', 'Larry Fink predicts AI shortages will create a new trillion-dollar asset class for guaranteed computing power.', 'Coherent Corp. secured a multi-billion dollar partnership with NVIDIA to support AI data center infrastructure.', 'A fraud site built using AI code from Cursor leaked 345,000 stolen credit cards due to a security flaw.', 'Experts warn that AI use for homework may reduce cognitive engagement by 55% in young students.', 'Tech giants plan to spend approximately $700 billion on AI by 2025 regardless of economic conditions.', 'The UK faces a potential $230 billion economic opportunity if it adopts AI technologies.']Microsoft Looks Cheaper Than Alphabet for AI Stocks
An investor compares Microsoft and Alphabet as top choices for artificial intelligence stocks. Both companies have strong cloud computing businesses and are spending billions to build data centers. Alphabet shows faster growth with a 63% rise in cloud revenue, while Microsoft grew 40%. However, Microsoft's stock price is much lower than Alphabet's recent high levels. The article concludes that Microsoft appears to be the better bargain for investors right now.
Microsoft Is the Better AI Stock Buy Than Alphabet
Keithen Drury from The Motley Fool analyzes whether Microsoft or Alphabet is the better investment for AI. Alphabet has higher growth rates, with its Google Cloud revenue jumping 63% compared to Microsoft's Azure at 40%. Alphabet also sells its own custom chips called TPUs, which gives it an edge. Despite these wins, the author argues that Alphabet's stock price is too high. Microsoft is trading near decade lows, making it a strong bargain for buyers.
Top AI Stocks to Buy With $1,000 in May Include Amazon
This article suggests three AI stocks for investors with $1,000 to spend in May: Amazon, Alphabet, and Microsoft. All three companies rely heavily on cloud computing, which is expected to last for decades. Amazon is investing $200 billion in data centers to support its AWS cloud unit. Alphabet is growing fast because it sells custom chips called TPUs alongside its cloud services. Microsoft offers solid growth at a lower price point compared to its competitors.
AI Use May Cause Cognitive Decline in Young Students
New research suggests that using AI tools for homework might reduce cognitive engagement by 55% in students. This effect can last even after students stop using the tools, unlike the temporary effects of alcohol. Studies show that many American 12th graders now lack basic math and reading skills. Experts warn that education companies selling AI tutors face potential regulatory scrutiny. Parents are advised to monitor how their children use AI for schoolwork.
Larry Fink Says AI Could Create a New Trillion Dollar Market
BlackRock CEO Larry Fink argues that AI shortages could create a new trillion-dollar asset class. He predicts that companies will buy contracts to guarantee future access to computing power, similar to oil futures. This idea comes as demand for chips, memory, and electricity for AI data centers skyrockets. Goldman Sachs estimates AI data centers could use 8% of U.S. electricity by 2030. Companies like Nvidia, Broadcom, and Constellation Energy are well-positioned to benefit from this trend.
Alphabet Poised to Become World's Largest Company
Alphabet Inc. is on track to become the largest company in the world by market value. The company has moved from being an afterthought in AI to dominating nearly every technology sector. Its acquisition of DeepMind in 2014 helped establish its leadership in artificial intelligence research. Alphabet also invested $375 million in AI chip maker Cerebras Systems to strengthen its hardware capabilities. With a market capitalization over $1 trillion, Alphabet is set to surpass Nvidia as the biggest firm globally.
Tech Giants Spend $725 Billion on AI Projects
Major technology companies are investing a record $725 billion in artificial intelligence projects. This massive spending is causing their cash reserves to shrink significantly. Analysts predict that combined free cash flow for these giants will drop by $4 billion in the third quarter. Amazon is expected to spend more cash than it earns this year, while Meta and Microsoft may also burn cash. Google's parent company Alphabet will see its cash flow dip to its lowest level in over a decade.
History Suggests AI Spending Will Continue During Recessions
The history of Ma Bell, the old telephone monopoly, offers lessons for today's AI spending. Ma Bell kept investing in new technology even during difficult times, which helped it survive industry changes. Similarly, tech giants like Google, Amazon, and Microsoft plan to spend around $700 billion on AI by 2025. Experts believe this investment in efficiency and growth will persist even if the economy slows down. This trend could present a buying opportunity for investors in the AI sector.
Coherent Stock Gains From NVIDIA Partnership and AI Growth
Coherent Corp. reported strong sales and profits in the third quarter of fiscal 2026. The company confirmed a multi-billion dollar collaboration with NVIDIA to support AI data centers. Coherent is also expanding its production of 6-inch indium phosphide wafers for AI infrastructure. This partnership ties the company directly to long-term AI programs. Analysts now project Coherent could reach $12 billion in revenue and $1.9 billion in earnings by 2029.
Fraud Site Built With AI Code Leaks 345,000 Credit Cards
A criminal website called Jerry's Store accidentally exposed 345,000 stolen credit cards due to a security flaw. The site used AI coding tools from a company called Cursor to build its systems. The flawed code left the server open, allowing researchers to access names, card numbers, and security codes. The leaked data includes nearly 200,000 invalid cards and over 145,000 active cards worth up to $2.6 million. Experts warn consumers to monitor bank statements and urge companies to test AI-generated code carefully.
Cathie Wood Ranks Amazon as a Top AI Stock Pick
Investor Cathie Wood considers Amazon a top choice for artificial intelligence stocks. Amazon's cloud platform, AWS, is a major player in providing tools for AI development. The company also offers AI services like the Alexa virtual assistant and the SageMaker machine learning platform. Amazon has invested heavily in AI research and is seeing revenue growth from these new services. Its strong innovation track record positions it well to lead in the AI revolution.
UK Must Adopt AI to Gain $230 Billion Economic Boost
Britain needs to embrace artificial intelligence to avoid losing a potential $230 billion economic opportunity. Experts warn that resisting AI progress could harm the nation's wealth and security. The article argues against the idea that AI will lead to negative outcomes for society. Instead, adopting AI technologies is seen as essential for future growth. The piece was published in The Times on May 10, 2026, by James Wise.
Sources
- Better Artificial Intelligence (AI) Stock: Alphabet or Microsoft
- Better Artificial Intelligence (AI) Stock: Alphabet or Microsoft
- The Best Artificial Intelligence (AI) Stocks to Buy With $1,000 in May
- Generational Risk: AI Is Making Kids 55% Dumber
- BlackRock’s Larry Fink Says AI Is Creating a New Trillion Dollar Asset Class -- And Trump’s Policies May Accelerate It
- AI Wins Have Alphabet Poised to Become World’s Biggest Company
- Tech Giants' Cash Reserve Shrinks Amid $725 Billion AI Investment
- Ma Bell's history hints that AI could be recession-proof
- What Coherent (COHR)'s NVIDIA Alliance and AI Wafer Expansion Means For Shareholders
- AI-built fraud site exposes 345,000 stolen credit cards after security lapse, researchers reveal
- Why Amazon (AMZN) is a Top AI Stock Pick of Cathie Wood?
- Britain must embrace AI or sacrifice a £230bn economic boost
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