Business · Markets · 1 hr ago
AI spending fears push investors toward government bonds
Investors sold technology shares and moved money into safer government bonds as doubts grew about whether the huge cost of building AI systems will bring enough returns.
The concerns were sharpened by results from Amazon and Intel, which showed heavy cash outflows, and by Alphabet’s steep share-price fall after its AI spending turned cash flow negative.
The sell-off spread across global technology markets, while US government bonds gained as investors sought a safer place for their money.
Bond prices rise when yields fall, and the yield on 10-year US Treasury bonds was heading for its biggest monthly decline since December 2023.
The market is questioning whether AI investment can earn back its cost, and whether higher prices for devices such as phones and computers could weaken consumer demand.
Investors are also watching the planned Anthropic IPO as a test of appetite for AI companies.
Attention now turns to US Treasury borrowing plans and December’s interest-rate decisions, while future moves by central banks remain uncertain.
Technology shares fell on Friday as investors questioned whether heavy spending on artificial intelligence would generate sufficient returns.
Investors moved towards safer assets, lifting US Treasury prices and pushing yields lower.
The US 10-year Treasury yield fell 6 basis points to 4.925 per cent.
Amazon and Intel shares dropped after their results raised concerns about cash use and AI-related spending.
The sell-off followed a sharp fall in Alphabet shares the previous session, wiping about $500 billion from its market value.
- Who
- Investors, technology companies and US Treasury markets.
- What
- Technology shares fell while US Treasury prices rose as investors sought safer assets.
- When
- Friday, October 30, 2026.
- Where
- Global markets, including the United States, Europe and Asia.
- Why
- Investors worried that large and rising AI spending may not deliver sufficient returns, and that higher costs could affect consumer demand.
This story does not have two clearly opposing sides.
The US 10-year Treasury yield reached 5.365 per cent, its highest level since 2002.
Alphabet shares fell sharply, wiping about $500 billion from the company’s market value.
Technology shares slumped as investors worried about AI spending, while US Treasury prices rose and yields fell.
- 10-year Treasury yield
- Fell 6 basis points to 4.925 per cent on Friday
- October yield change
- 10-year Treasury yield was on course to fall 36 basis points
- Nasdaq 100 futures
- Pointed to a decline of more than 2.5 per cent
- Amazon shares
- Fell 6 per cent after hours, according to Business Standard
- Intel shares
- Fell 25 per cent in out-of-hours trading
- Alphabet market value
- About $500 billion wiped out after Thursday’s share fall
4 sources
What people are saying
The next key milestone will be the Anthropic IPO, to see how that lands. If it’s a poor listing, I think that could signal a bit of weakness going forward
I suspect the negative price action still has some way to go
US Treasuries are still responding strongly to shifts in sentiment linked to AI valuations and stock market volatility