Big Tech’s ‘Spend Little, Earn Lots’ Formula Is Threatened By AI

For two decades, the playbook for Big Tech was fairly simple and extremely successful: Create disruptive innovations, deliver blinding growth rates and keep a lid on spending.

A handful of behemoths like Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp.used this formula to seize market share from legacy businesses and power the US stock market to record after record. But a key part of the program — the relatively small amount of capital required to generate those huge profits — is increasingly under threat from the race to develop artificial intelligence.

“They’re some of the ...