Big tech's AI spending binge is starting to scare investors, and this reads as a warning sign for the whole stock market.

• Google's stock had its worst day ever, losing $500 billion in value after search revenue missed targets and AI spending costs piled up.
• Amazon and Meta shares also dropped after showing heavy AI spending and cash burn, with Meta even issuing new stock to raise money.
• Nearly every major tech company except Microsoft is now spending more cash than it brings in, betting huge on AI paying off later.
• Some companies have taken on hundreds of billions in debt with locked-in, unbreakable payment contracts for data centers, and Anthropic is reportedly facing a junk credit rating ahead of its IPO.
• Banks have lent these companies enormous sums, raising fears that if one AI giant stumbles, it could drag down banks and the broader economy the way overleveraged banks did in 2008.

Outlook: Expect more shaky earnings reports and stock swings from AI-heavy tech companies, with growing worry that a major AI player failing could trigger wider economic damage.