Arvind Krishna says "did not anticipate the magnitude of the capex reprioritization" in AI spending

Shares of major tech companies fell sharply after Alphabet and Tesla announced steep increases in artificial-intelligence spending, alarming investors worried about whether the huge outlays will generate returns. Alphabet raised its capital expenditure forecast to between $195 billion and $205 billion for this year, while Tesla reported a 142% surge in second-quarter capex and expects over $25 billion in annual spending. The sell-off follows a similar drop for IBM last week, when its stock suffered its worst day in decades after the company acknowledged weakness in its AI strategy. IBM CEO Arvind Krishna commented that his firm had not foreseen how dramatically the industry would shift its capital spending priorities.