Alphabet Slumps 3.6%, Driven by High AI Costs and Meta Competition

Alphabet's Class A shares (GOOGL) dropped more than 3.6% on Wednesday. Investors cited concerns regarding high artificial intelligence expansion costs and rising competition.

Heavy infrastructure investments for Gemini AI models face scrutiny over their impact on profitability. Market participants rotated capital toward Meta Platforms as its AI developments gained market attention.

YouTube announced new creator tools to compete with Netflix for digital talent. Google also unveiled two new text-to-speech AI models: Gemini 3.8 Flash TTS and Flash-Lite TTS.

These developments failed to offset broader concerns regarding high capital expenditures and the competitive AI landscape.