Amazon shares plunged yesterday, knocking more than £15billion off founder Jeff Bezos's fortune as investors took fright at its mammoth artificial intelligence (AI) spending plans.
The 10 per cent slide came after it outlined investments of £147billion this year, joining an arms race of big tech firms splashing out on data centres to power what they believe will be an AI revolution.
It bookmarks the end of a wild week for markets as investors struggled to digest the total £460billion planned outlay by the tech giants. Microsoft and Google owner Alphabet's shares fell days earlier as worry mounted on whether vast AI spending would be matched by returns.
AJ Bell investment director Russ Mould said: 'It's been obvious for a while that the market isn't a fan of huge AI spending commitments from the big tech contingent, and the reaction to Amazon's latest update is just the latest example.'
Amazon's results also showed that sales growth in its cloud computing unit Amazon Web Services had been slower than those of rivals Google and Microsoft.
It comes only a week after Amazon told staff it plans to cut about 16,000 jobs globally as part of efforts to streamline its operations.
The sharp shares fall had a significant impact for Bezos, as he owns a 9 per cent chunk of the company. Some of the losses were clawed back by the close of trading last night with shares down nearly 8 per cent. Developments in AI have this week taken their toll on data and software stocks such as UK-listed Relx, Sage and the London Stock Exchange Group (LSEG).
These followed the launch of a chatbot by Anthropic that will automate legal work, raising fears over whether established software firms can keep up.
Relx shares plunged a further 5 per cent yesterday and it has lost 17 per cent over the week. Sage dipped 3 per cent, bringing its decline for the week to 12 per cent. And LSEG saw a fall of 1 per cent - 8 per cent down since the previous Friday.
Gold and silver have also had a torrid time - having hit record highs at the start of January thanks to their 'safe haven' status at a time when the dollar was clobbered by a 'sell America' trend.
Yesterday, gold sank to as low as $4,654 per ounce - 17 per cent below its peak of nearly $5,600 a week earlier. Silver crashed to $64 this week, too, 47 per cent down from its $122 peak.
Bitcoin has also suffered a spectacular decline. The cryptocurrency fell close to $60,000 yesterday, though later enjoyed a sharp recovery to $70,000 and beyond.