--- title: "AI Companies Lose $190 Billion After Dismal Financial Reports" description: "Reuters reports that AI-related companies lost $190 billion in stock market value on Tuesday following disappointing earnings reports." date: "2024-01-31" modified: "2024-01-31" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/the-byte/ai-companies-lose-190-billion-dismal-google-report" categories: - "Artificial Intelligence" tags: - "ai industry" - "alphabet" - "Google" - "microsoft" - "the digest" --- # AI Companies Lose $190 Billion After Dismal Financial Reports ![Reuters reports that AI-related companies lost $190 billion in stock market value on Tuesday following disappointing earnings reports.]() *\Image: Futurism\* ## Gravy Train Derailment Following disappointing quarterly earnings results by Microsoft and Google owner Alphabet, [*Reuters* reports]() that AI-related companies lost a whopping $190 billion in stock market value. Microsoft may have eked out a win, with the promise of AI services convincing investors, but even its stock dropped by 0.7 percent in extended trade, per the report. Google's parent company fared much worse, [dropping 5.6 percent]() after missing ad revenue expectations. Meanwhile, AI chip producer AMD [also got hit](), despite reporting a solid quarter. It's hard what to make of the news. The dropoff could indicate the start of investors becoming wary of tech companies overpromising on AI, especially without a clear path to monetization. At the same time, Microsoft and Alphabet stocks have [hit record highs]() following a year of AI hype. Microsoft beat Apple by [becoming a $3 trillion company]() earlier this month, a massive vote of confidence for its doubling down on the tech. But given this week's seemingly counterintuitive news, the seams may be starting to show. ## Peak AI? According to Deutsche Bank strategist Jim Reid, the downturn may be "signaling some overextension of the recent strong rally," according to a note [seen by *Yahoo Finance*](). Other analysts were far more bullish. "This knee-jerk reaction \[to tech results\] is noise, the AI revolution has started," Wedbush analyst Dan Ives told *Yahoo Finance*. It's still too early to tell if the recent drop in stock value is related to investors becoming weak on AI. Are they spooked by the daunting costs of expanding infrastructure to keep up with a surging appetite? Data centers designed to crunch data for tools like ChatGPT, which Microsoft has integrated into its software, aren't just incredibly expensive to build — they're also [extremely pricey to run](). In short, has Wall Street really hit peak AI? Are we looking at a bubble that's about to burst? At the end of the day, it's all going to hinge on whether AI companies can figure out a way to make money. **More on AI:** *[AI Is Starting to Look Like the Dot Com Bubble]()* ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()