Technology giants are investing hundreds of billions of dollars in artificial intelligence. Yet Wall Street is starting to lose patience. Costs are rising, free cash flow is falling, and major corporations are reducing their workforces. Could the AI revolution trigger another economic crisis?
Until recently, investing in artificial intelligence almost guaranteed an enthusiastic response from stock market investors. The more technology companies pledged to spend on data centres and AI models, the higher expectations climbed for future profits. That dynamic is now beginning to reverse.
The New York Times warns that enormous investments in AI infrastructure are consuming increasing amounts of cash, while Wall Street is beginning to question the economics of the technology race.
In its article of 29 October 2026, “Big Tech’s Data Center Blitz Is Burning Through Cash and Scaring Wall Street”, the newspaper describes investors’ growing concerns about the costs incurred by America’s largest corporations.
The question is no longer simply whether artificial intelligence will change the world. Increasingly, it is whether companies investing astronomical sums in it can generate returns quickly enough.
Artificial intelligence is consuming billions of dollars
Developing AI requires vast data centres, expensive processors, expanded energy infrastructure and cooling systems. The problem is that the spending takes place today, while future profits remain uncertain.
Amazon reported revenue of $201.9 billion and net income of $20.7 billion in the third quarter of 2026. Yet its free cash flow for the preceding twelve months was negative by $42.4 billion. The company plans approximately $220 billion in capital expenditure in 2026. Amazon’s third-quarter 2026 results.
Similar pressures affect Alphabet, Google’s parent company, which reported approximately $9 billion in negative free cash flow for the third quarter. Following its results, its shares fell by more than 12%, wiping roughly $500 billion off its market value. Analysis of Alphabet’s results.
Meta, the owner of Facebook and Instagram, is also feeling financial pressure from expanding its AI infrastructure.
American financial media describe this phenomenon as “burning cash”, or cash burn. Technology giants are pouring astronomical sums into artificial intelligence, counting on future profits to justify today’s spending. As a result, even businesses reporting record revenue can generate negative free cash flow. This increasingly raises the question of whether these are rational investments in the technology of the future, or an expensive race whose economic justification has yet to be demonstrated.
“Burning cash” is used here as a journalistic description of high cash consumption. Negative free cash flow is not the same as a net loss, nor does it prove insolvency. Capital expenditure also includes infrastructure used for purposes other than AI.
The paradox is that companies earning billions in profit are increasingly turning to external financing to keep up with the technology race.
Microsoft offers voluntary departures to 60,000 employees
On 26 October 2026, Microsoft announced a voluntary departure programme covering around 60,000 employees, more than a quarter of its global workforce.
As Reuters reported, the offer came at a time of record spending on artificial intelligence. However, the figure of 60,000 refers to employees eligible for the programme, not the number of announced layoffs. Reuters’ report on the voluntary departure programme.
Notably, Microsoft also reported a 32% rise in quarterly net income, to $36.6 billion. Capital expenditure, including finance leases, reached $45.2 billion in just three months. The New York Times’ report on Microsoft’s results.
The picture across the industry is not uniform: according to Reuters, Microsoft generated nearly $19 billion in positive free cash flow during the quarter. The major technology companies are therefore not all in the same financial position. Reuters’ analysis.
This raises a question: why is one of the world’s wealthiest companies, earning record profits, encouraging thousands of employees to leave?
The programme forms part of efforts to contain costs and reshape the workforce. Its announcement alone does not establish that artificial intelligence will replace every position covered by it.
Will AI cause mass unemployment in IT?
Artificial intelligence tools support and automate some of the tasks performed by programmers, testers, analysts and administrative staff. This may change the size and composition of teams, although it does not yet establish the scale of future job cuts.
This does not mean that IT professions will disappear. Demand for some existing skills could, however, fall substantially.
American lawmakers are also taking notice. In “Fearing Mass A.I. Layoffs, Some in Congress Eye Ways to Aid Workers”, published on 23 October 2026, The New York Times describes legislative initiatives intended to provide greater protection for people losing their jobs as artificial intelligence develops.
One particularly troubling possibility is that workforce reductions need not take the form of high-profile mass layoffs. They may involve gradually reducing new vacancies, declining to renew contracts and replacing departing employees with AI tools.
Could the dot-com crash happen again?
The current situation increasingly evokes the dot-com bubble at the turn of the millennium. Investors poured enormous sums into internet companies, believing in the limitless potential of a new technology. When the expected profits failed to arrive quickly enough, stock market valuations collapsed.
The internet did revolutionise the world, but that did not protect many investors from enormous losses.
The same could happen with artificial intelligence. The technology may prove transformative, while investment in its development may still be excessive or economically unjustified.
According to S&P Global Market Intelligence data cited by Axios on 29 October, five technology giants — Alphabet, Amazon, Meta, Microsoft and Oracle — had raised approximately $326 billion through share and bond issues from the start of 2026 to the date of publication. Axios’ overview.
If future revenue falls short of expectations, the consequences could include a sharp sell-off in technology stocks, lower investment and further workforce reductions.
Could a crisis also affect Poland’s IT industry?
Poland is an important European market for IT services, outsourcing and software development. Many businesses deliver projects for American technology corporations.
Any reduction in those corporations’ spending could also mean fewer orders, hiring freezes, renegotiated pay and non-renewal of business-to-business contracts in Poland.
From a legal perspective, the terms governing contract termination, notice periods and the scope of protection available to people working under different contractual arrangements would become particularly important.
Is the AI revolution beginning to devour its own children?
Until recently, artificial intelligence was presented as an engine of unprecedented economic growth. Today, questions about the costs of that transformation are becoming increasingly prominent.
Technology giants are investing hundreds of billions of dollars in infrastructure whose economic potential has not yet been fully tested. At the same time, they are reducing headcount, restructuring their businesses and seeking additional capital.
This does not mean that a financial crisis is inevitable. It is becoming increasingly clear, however, that enthusiasm for artificial intelligence alone is no longer enough for investors.
Perhaps the greatest paradox of the coming years will be that a technology heralded as a source of unprecedented wealth also drives far-reaching restructuring of businesses and the labour market.
I previously addressed this issue in my article “Is Artificial Intelligence a Speculative Bubble?”, in which I examined the risks associated with the rapid rise in AI company valuations. The latest reporting from The New York Times makes that question even more relevant.
Information current as of 30 October 2026. Some source publications may require a subscription. Predictions about a crisis and its consequences for Poland are assessments of possible scenarios, not descriptions of an inevitable outcome.