Meta’s shares took a nosedive as the social media giant announced it would boost its artificial intelligence (AI) spending to between $130bn and $145bn this year. The move comes despite shrinking profits and declining free cash flow, triggering investor concerns about the cost of AI advancement.

The firm's chief financial officer, Susan Li, stressed that selling tech to other companies would help recoup these expenses, but with only vague plans on the horizon, analysts are questioning whether this is a strategic move or a distraction. Meanwhile, Microsoft’s shares rallied despite its own significant AI investments, hinting at investor appetite for high-risk big bets.

Meta's CEO Mark Zuckerberg remains bullish, asserting that AI will boost user engagement and small business advertising capabilities. He envisions 24/7 personal agents as the future of his product line. However, he admitted that while the financial opportunity is significant, there’s no guarantee it will pay off.

The success of these massive AI investments in the market remains to be seen, with many investors left wondering whether they are funding a future revolution or just digging an ever-deeper hole.