Shares in Meta Platforms tumbled sharply following the company’s announcement of extensive spending plans on artificial intelligence initiatives, sparking a broader sell-off in the US technology sector. On Thursday, Meta’s stock dropped about 7 percent, erasing over $120 billion from its market value. The company disclosed it would need to raise “hundreds of billions of dollars” over the coming years, starting as early as this autumn, to finance investments in data centers, computing power, hardware, and other AI infrastructure.

The announcement reignited investor concerns about the mounting debt being used by tech firms to fund aggressive AI expansion. Meta reported that its future spending commitments had increased to roughly $825 billion—a significant rise from the nearly $700 billion it projected just a few months earlier.

The fallout extended beyond Meta, with the Nasdaq 100 index, heavily weighted toward technology stocks, sliding 2.6 to 2.7 percent—the biggest one-day decline since June. SpaceX, another major player in technology and AI investments, saw its shares fall more than 6.7 percent after signaling plans to increase AI spending substantially. Nvidia, the leading chip manufacturer expected to benefit from AI growth, also retreated about 4.4 percent despite the potential upside from increased demand for data center components.

The broader S&P 500 index declined around 1.2 percent, marking its worst day in three months and ending a recent three-day winning streak. Analysts noted that the sell-off reflected rising risk aversion amid doubts over the sustainability of the AI investment boom, which relies heavily on debt financing estimated to exceed $1 trillion across the sector.

In the fixed-income market, investors sought refuge in US government bonds, pushing yields lower. The yield on the 10-year Treasury note fell below 5 percent in what was the steepest single-day decline in more than a year. This flight to safety coincided with ongoing volatility in European bond markets, where yields in countries like France and Italy rose amid concerns about energy inflation, fiscal challenges, and political uncertainties. France’s 10-year government bond yield surpassed 5 percent for the first time since 2002, with spreads widening across the Eurozone, signaling increased investor nervousness about the region’s economic prospects.

Adding to market jitters, oil prices climbed sharply, with Brent crude reaching about $113 per barrel, the highest level since March. The rise was partly driven by strikes and geopolitical tensions in the Persian Gulf region, which have disrupted oil exports. The conflict in the Middle East has also contributed to significant increases in fuel costs globally, with average gasoline and diesel prices in the United States rising notably since the onset of the conflict nearly eight months ago.

Investor opinion remains divided on the outlook for AI-driven growth. Some market participants warn of an overheated bubble fueled by aggressive spending, while others maintain that strong demand underpins the sector’s long-term potential. Treasury Secretary Scott Bessent emphasized in a recent private meeting that he did not see systemic risks arising from the AI boom despite current market volatility.

Overall, the combination of surging AI investment costs, rising energy prices, and geopolitical instability has heightened uncertainty across global financial markets, prompting investors to reassess risk and seek safer assets.