AI Spenders Get Spooked

Who’s going to pay for the global AI build-out?

It’s a trickier question than it seemed just a few days ago. One answer has long been that hyperscalers such as Google and Meta could fund much of it out of their colossal profits.

Confidence in that scenario took a blow Wednesday when Google reported that its own AI offerings are bleeding growth from its cash-cow search ads, with monetization of AI-style queries still a work in progress. Google’s market capitalization shed $500 billion in the stock’s worst day ever, dragging down indexes that fell further as Intel and Amazon reported results that concerned investors.

There’s always Wall Street. But lenders and investors there are getting choosier about where to place their bets and are demanding tougher terms, my colleagues Peter Rudegeair, Robbie Whelan and Jack Pitcher reported.

Eagerness to crowd into the AI trade in any way possible has cooled as banks have raised concerns over exposure and data-center delays, while climbing interest rates have made debt offerings less attractive. Neo-clouds—the newer AI cloud providers—have been especially affected by the pullback, forcing some on the IPO track to delay or downsize offerings.

OpenAI has also had to pare its ambitions in a private funding round ahead of an expected IPO next year. It had been seeking $30 billion at a $1.4 trillion valuation but, as my colleague Berber Jin reported, it has raised less than half of that at a $1.25 trillion valuation.

—Erin is a technology reporter based in San Francisco.

That was made abundantly clear this past week with the public filing of paperwork for AI-juggernaut Anthropic ahead of what may be the largest IPO ever. The prospectus detailed the voting power given to the company’s seven founders at the expense of would-be investors.

It felt wrong, getting fingerprints on this brand-new MacBook screen on purpose. As I poked and prodded the new Pro’s display, the question on my mind was: If and when a touch screen comes to the MacBook Air and other models, what will I do with it?

Home-security cameras are meant to reduce the anxiety we feel from the unknown: Who’s at the door? How is the baby sleeping? What’s happening at home when we’re on vacation? There are cases, however, when the video feed only fuels our worries. And in rare instances, what we see can be inexplicable—or downright terrifying.

Innovators are using techniques refined by the pharmaceutical industry to create “bioidentical” cocoa-bean cells, leading to the first bars made from experimental, lab-grown chocolate. Other companies are scaling up processes for roasting or fermenting agricultural waste products, to make them good-enough substitutes for the primary ingredients in chocolate.

Anthropic is giving new meaning to the idea of a total addressable market—a business term for potential revenue opportunities. In a filing ahead of its planned IPO, the AI company didn’t explicitly list a “total addressable market” figure but suggested it is staring down a $40 trillion-a-year opportunity if it captures the entirety of demand.

Thrive Holdings, a Kushner-led firm that acquires older businesses and infuses them with AI, agreed to acquire ADT in a $7.6 billion all-cash deal with an enterprise value of $15.3 billion. It is the latest move in his aggressive push to back businesses far removed from the heated AI race.

Chip on the Shoulder: Apple for years bullied flash-storage makers into steep discounts—until AI hyperscalers bid up prices and gobbled up supply.

Offloading: Microsoft offered voluntary buyouts to 60,000 employees—about one quarter of its staff—facing pressure to shrink head count as it invests in AI.

Made in America: A JV between Anduril and Qualcomm aims to make rugged laptops for military and government using materials sourced from the U.S. and allies.

Pushing Back: As midterms near, Google, Meta and other tech giants are ramping up resistance to ICE in bid to avoid Democratic scrutiny.

…when we spend $2,000 on a fancy new iPhone—and it immediately breaks.

The Technology newsletter is a weekly digest of tech reviews, columns and headlines from Anne Steele and Wilson Rothman. Write to Wilson at wilson.rothman@wsj.com and Anne at anne.steele@wsj.com. Got a tip for us? Here’s how to submit.