Meta, Amazon, Alphabet are spending big money to dominate AI. It may not end well.

Future versions of Meta’s large language models will also require significant computing resources — and investment. But Zuckerberg believes that spending money on them now will prepare the company for the future.

“It’s hard to predict what this will look like generations down the road, but at this point I’d rather risk building capacity before it’s needed than too late,” he said. “And as we scale these investments, of course we’ll continue to drive operational efficiencies across the business.”

Meanwhile, during Alphabet’s earnings conference call, CEO Sundar Pichai said that “the risk of underinvestment is much greater than the risk of overinvestment” and that AI-related projects will benefit the company in the long term.

But all this spending has not yielded any return so far. is starting to unnerve investors and raise fears of an AI tech bubble — triggering $1 trillion in losses for the Nasdaq 100 on Wednesday as nervous investors rushed to sell. The tech-heavy Nasdaq fell another 3% on Friday and is down more than 10% since early July.

“After last year’s hype, executives are eager to see the returns on their GenAI investments, but organizations are struggling to prove and realize the value,” says Rita Sallam, research director at technology research firm Gartner. he said at the Gartner Data & Analytics Summit earlier this week. “As the scope of initiatives broaden, the financial burden of developing and deploying GenAI models is increasingly felt.”

Gartner research shows that generative AI requires executives to be more tolerant of intermediate future investment gains than immediate returns, something many CTOs have historically been uncomfortable with.

Gartner research also found that at least 30% of generative AI projects are likely to be abandoned by the end of 2025 due to “poor data quality,” “insufficient risk controls,” and “rising costs.”

Meanwhile, investor management firm Eliott Management said in a note on Friday that its analysts believe AI is in a “bubble” and is mostly “noise.”

“There are few real applications,” the Financial Times reported, Elliott said, beyond “summarizing meeting notes, generating reports and assisting with computer coding.”

But Big Tech executives believe that generative AI will bring some of the biggest technological changes the world has seen in the past century — so it’s worth risk.

Amazon CEO Andy Jassy said in a letter to shareholders earlier this year that generative AI “could be the biggest technology transformation since the cloud,” and perhaps even “since the internet.”

The company plans to spend $150 billion over the next 15 years on data centers, which are one of the largest cost drivers of AI. The company also plans to invest about $230 million in funding for new AI startups.

Amazon CFO Brian Olsavsky acknowledged on a call with reporters this week that AI “is certainly a very expensive area where building capacity is very difficult,” when asked about investor concerns about big tech companies spending to prepare for the new world of AI.

Still, he said, the investment will eventually pay off. “We’re seeing customer demand signals, we’re investing, we’re building data centers for generative AI, we’re getting the chips, we’re getting the power, everything else — and then once those assets are in the ground, we’re using them to generate revenue and free cash flow for the next decade and beyond,” he said. So the investment is actually “a really positive indicator.”

Some analysts believe it won’t be long before these companies start seeing big gains from their spending. “This revolution is happening,” Wedbush Securities analyst Dan Ives told “Squawk on the Street.” “The monetization phase is just beginning.”

“This is not the time to panic,” he added.