US tech stocks tumbled on Friday as investors grew concerned about the mounting costs of building artificial intelligence systems.
Intel shares fell as much as 30% after the chip maker warned of a weaker computer market while planning to increase spending on AI. The company's finance chief David Zinsner said Intel did not expect to bring in more cash than it spent this year and forecast lower-than-expected revenue for the fourth quarter. "Looking ahead, we see the PC slowdown continuing at least through the first half of next year," Zinsner said in the earnings report.
Amazon shares fell as far as 6% before recovering after reported earnings fell short of expectations. The company revealed it was spending more cash than it made, with spending increasing six-fold over three months.
The Nasdaq opened Friday down 2.5% at its lowest level in more than two months. Shares in Reddit fell 26% after the platform reported weaker-than-expected daily user figures and warned that Google's AI-driven search was hurting referral traffic. Roblox dropped nearly 20% as its daily active user numbers declined.
Alphabet stock fell 1% on Friday following a $500bn plunge on Thursday after the company revealed its AI summaries were affecting core search advertising revenue.
Chris Low from FHN Financial told Reuters the companies were "showing some pretty significant growing pains as they aggressively pursue the AI build-out" and said the signs suggested the entire sector would slow down.