What happened
Alphabet shares fell more than 12% on Wednesday, wiping a record $500B in market cap after it reported negative free cash flow amid accelerating AI infrastructure spend, the FT reported.
Why it matters
It is the first time AI capex has been priced as a cash-flow problem rather than a growth story for a hyperscaler, per the FT.
Summaries like this, every morning.
The selloff marks a shift in how investors are reading Big Tech's AI spending. Until now, heavy infrastructure outlays were treated as a growth signal; Alphabet's negative free cash flow flipped that framing into a cash-flow problem, and the market response was immediate — a more-than-12% drop and a record $500B of market value gone in a single session. The sympathetic 1.4%+ fall in the Nasdaq shows the reaction was not confined to Alphabet. The FT report frames this as the first time a hyperscaler's AI capex has been priced this way, which puts upcoming capex guidance from Microsoft and Meta under a harsher light this earnings cycle.
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