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Global Tech Stocks Slide as AI Disruption Fears Clash With Massive Spending Plans

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Global software, data and technology stocks fell again on Friday as investors remained uneasy about the disruptive impact of powerful new AI models and the enormous sums Big Tech plans to spend rolling them out. Markets were rattled this week after the launch of a new plug-in from Anthropic’s Claude, amplifying concerns that AI could undermine traditional software and data businesses just as hyperscalers signal capital expenditure of more than $600 billion this year.

Shares of major tech firms and data providers came under renewed pressure. Amazon slid 8% in pre-market trading after revealing hefty investment plans, while European firms such as RELX, Sage, Experian, Capgemini and Wolters Kluwer all posted sharp declines. London Stock Exchange Group also extended losses and was on track for a second consecutive week of steep falls, as the selloff in AI-exposed stocks weighed on broader markets.

The downturn has spilled across global equities, with world shares headed for their worst week since November and the S&P 500 down around 2% for the week. U.S. software and data services companies have lost about $1 trillion in market value since late January, while Indian IT stocks were hit particularly hard, shedding nearly 7% this week. Analysts say investors are increasingly wary of an emerging AI bubble, as strong business performance at tech giants fails to offset fears over ballooning capital investment.

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Italy’s Data Privacy Watchdog Faces Corruption Probe

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Italian finance police have searched the headquarters of the country’s data protection authority as part of a probe into alleged corruption and embezzlement, according to judicial sources. Rome prosecutors are investigating the agency’s president, Pasquale Stanzione, along with three other board members, over claims of excessive spending and irregularities linked to regulatory decisions.

Stanzione said he was “absolutely serene” when questioned by reporters, but declined to say whether he would resign. The opposition 5-Star Movement said the investigation had damaged the credibility of the authority and called for Stanzione to step down, intensifying political pressure on the watchdog’s leadership.

The Italian data protection authority, known as the Garante, is one of the European Union’s most active enforcers of digital privacy rules and has frequently taken action against major technology companies. In recent years, it has fined and briefly banned OpenAI’s ChatGPT, blocked China’s DeepSeek chatbot over privacy concerns, and last week warned AI platforms, including Elon Musk’s Grok, about the risks of generating deepfake images without user consent.

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European outcry forces US economist to drop top job

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Fiona Scott Morton, a highly qualified American economist, has decided not to take up the position of Chief Competition Economist in the European Commission following widespread criticism of her appointment. The strongest objections came from France, with President Emmanuel Macron expressing doubts and questioning whether there were no qualified European candidates for the role. Scott Morton, a Yale University economics professor, has an impressive background, including working in the US justice department’s antitrust department during the Obama presidency. However, she has also worked as a consultant for major tech companies like Apple, Microsoft, and Amazon, which raised concerns given that her job would involve regulating these digital giants.

EU antitrust chief Margrethe Vestager defended the appointment, highlighting Scott Morton’s corporate experience as an asset. Nevertheless, Scott Morton made the decision not to take up the post due to the political controversy surrounding her appointment and the importance of having the full support of the EU’s competition directorate. Opposition to her appointment came from various quarters, including President Macron and several Commission colleagues, as well as the four largest political blocs in the European Parliament. However, after discussions with Scott Morton, some concerns were addressed, and Philippe Lamberts of the Greens expressed support for her.

Critics argued that the criticism of Scott Morton’s appointment was unjustified since her role would primarily involve overseeing economic evidence in competition enforcement rather than favoring specific competitors. Nobel Prize-winning economist Jean Tirole praised her qualifications and stated that the European Commission was fortunate to have attracted someone of her caliber. Margrethe Vestager emphasized that the suggestion of bias based on nationality was questionable and clarified that Scott Morton would only need to recuse herself from a few cases.

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