Microsoft ‘s AI infrastructure spending to meet growing cloud services demand is outpacing Wall Street expectations, deepening investor fears about the costs of sustaining the boom.

The technology giant reported a record capital expenditure of nearly $35 billion for its fiscal first quarter on Wednesday and warned spending would rise this year, in a reversal of its earlier prediction that it would moderate.

Microsoft’s shares fell nearly 4% in extended trading.

Alphabet and Meta Platforms also warned of higher spending as Big Tech works to overcome capacity bottlenecks that have hampered companies’ ability to fully cash in on booming AI demand.

But the rising spending, as well as soaring valuations of tech companies and limited evidence of productivity gains for businesses adopting

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