AI Is Picking the Locks on Europe’s Gatekeeper Rules
Big Tech is spending a fortune to secure a future that competition regulators seem to think it already owns. Investors aren’t so sure. They’re losing patience with the industry’s artificial intelligence (AI) bill—and questioning what all that spending will buy.
Alphabet shares sank more than 12% last Thursday—the company’s worst trading day on record—after both revenue and profit missed expectations for the first time in nearly four years. Google’s core advertising business fell short of expectations, and free cash flow—the cash left after operating expenses and investments in assets such as data centers—turned negative by $9.1 billion. The company’s chief financial officer also warned that capital expenditures would increase significantly in 2027.
Amazon fared little better. Its shares closed down more than 4% ahead of its earnings release, then slid another 6% after hours when the company revealed that it had spent $75.9 billion on capital expenditures in a single quarter, while generating just $42.4 billion in cash from operations. Meta had already shed 6.98% the previous week over its own spending plans.
As The Economist, CNN, and CNBC all reported, investors increasingly question whether Big Tech’s massive AI spending will ever pay off. Alphabet’s results also stoked fears that consumers’ shift to AI chatbots threatens Google’s core search-advertising business.
It would be unwise to read too much into a few days of trading. Stock prices are noisy, and markets have swung between AI euphoria and anxiety more than once this year. But the sell-off sharpens a question for competition policymakers—one that sits uneasily with the regulatory frameworks they’ve spent the past five years building: What if the dominant platforms those frameworks label “gatekeepers” aren’t nearly as entrenched as policymakers assumed?