For the biggest tech companies, this earnings season is starting to feel like a scene from the movie Jerry Maguire – and the “show me the money” demands don’t work any better than they do with Tom Cruise. Some analysts even call this the “Show me the money” districtlike the patience of Wall Street massive AI spending starts to get thin.

A Sell-off in tech stocks Thursday deepened as investors faced rising costs in Silicon Valley artificial intelligence Ambitions. Microsoft (MSFT) shares fell 6% and Facebook parent Meta (META) fell 4% after the companies reported earnings late Wednesday. And in after-hours trading on Thursday following its own earnings release, Amazon reported (AMZN) stocks fell more than 3% and Apple (AAPL) fell by 2% – despite all four companies reporting strong quarterly Profits. (Some of the stocks rose slightly again in premarket trading on Friday.)

Almost two years after ChatGPT launched The AI ​​gold rush in Silicon ValleyThis week’s tech results revealed both the promise and the staggering cost of the AI ​​revolution. While companies reported significant gains from AI initiatives – Meta’s ad prices rose 11%, Google Cloud Sales rose 35% to $11.4 billion, Amazon’s AWS is growing 19% to $27.5 billion – their warnings about future spending triggered a broad market decline.

Meta expects investments of up to $40 billion next year, Microsoft warned of ongoing OpenAI losses and slowed cloud growthand even Apple is taking its first tentative steps into AI Introducing Apple Intelligence This week investors retreated – despite Record sales of $94.9 billion.

Tech executives’ unwavering belief in the potential of AI stands in stark contrast to investors’ growing fears about its costs.

“First, it is clear that there are many new opportunities to leverage new AI advances to accelerate our core business, which should deliver strong ROI over the next few years,” Meta CEO Mark Zuckerberg told investors.

Amazon CEO Andy Jassy expressed similar sentiments: “I think we’ve proven over time that we can generate enough operating income and free cash flow to make this business a very successful return on invested capital.” We’re walking away from that “The same thing will happen here with generative AI.”

Satya Nadella, CEO of Microsoft, emphasized: “AI-driven transformation.” And earlier this week Google (GOOGL) Chief Sundar Pichai emphasized: “extraordinary swing.”

But while technology leaders talk confidently about long-term returns, the market is increasingly focused on the short-term price of these ambitious visions. Rising infrastructure costs combined with uncertain return timelines are testing investors’ patience with Silicon Valley’s “spend now, profit later” approach to innovation.

Microsoft shares fell more than 6% on Thursday after executives predicted Azure’s growth would slow and warned of weaker expansion of its AI-powered cloud business. The guidance suggested this was the case even for Microsoft proved to be one of the early AI leaders By partnering with ChatGPT maker OpenAI, the path to AI profits could be longer and more costly than investors had hoped.

“AI-driven transformation is transforming work, work artifacts and workflows across roles, functions and business processes,” said Nadella, whose company saw total revenue increase 16% to $65.6 billion. Microsoft’s total cloud revenue rose 22% to $38.9 billion, but the company expects growth in its intelligent cloud segment to slow to 18-20% next quarter.

At Google parent Alphabet, Pichai pointed to new AI capabilities in search and the cloud as key growth drivers, helping to increase revenue by 15% to $88.3 billion. Google Cloud’s profit rose to $1.9 billion from $266 million last year, suggesting the company is finding ways to monetize its AI investments.

Meta used AI to revitalize its core advertising business, and revenue rose 19% to $40.6 billion. The company forecast fourth-quarter revenue between $45 billion and $48 billion, above analysts’ expectations. However, Chief Financial Officer Susan Li warned of a “significant acceleration in infrastructure spending growth next year” due to the “back-end weighting” of capital spending for 2024 and the buildout of AI infrastructure.

The massive spending plans make it clear that AI’s transformation of the tech industry is still in its infancy. As technology begins to deliver measurable business results, tech giants are betting billions that the real prize lies ahead – and asking investors to be patient. Goldman Sachs (G.S) has recently raised concerns that while AI has the potential for significant efficiencies in certain areas, the high costs associated with developing and maintaining AI systems may in many cases outweigh the benefits – potentially making them more expensive than simple hiring human workers for specific tasks.

With robust cash balances and strong core businesses, these companies appear able to maintain their AI investments even as costs rise. But the market’s reaction to Microsoft and Meta’s warnings is a reminder that the AI ​​revolution is proving to be an increasingly costly endeavor with uncertain returns for even the strongest players in technology.

Like Jerry Maguire’s demanding customer in the 1996 film, Wall Street’s message to Silicon Valley is becoming clearer by the day. As Bank of America (BACThe report states: “We expect AI to shift from a “tell me” to a “show me” story, with increased scrutiny of any discrepancy between investment and revenue generation.”