Is AI heading for a doomsday scenario?

Mega-cap spending on AI expansion with no guardrails

The tech juggernaut has hit a wall. In the third quarter ending Sept. 30, the S&P 500 Information Technology Index gained only 7.6%. Compare that with the one-year gain of 41% to the same date, and the extent of the 2026 slowdown is clear.

Part of the reason may be profit taking after a long run-up. But the controversy over Artificial Intelligence has almost certainly caused some investors to think twice about where the sector is heading.

The warnings about mankind possibly being wiped out within a few years are sobering indeed. And President Trump’s insistence that there should be no pause in AI development, despite growing pleas from the leading AI companies for government intervention, shows an astounding level of recklessness.

No one knows with certainty where all this is going. But we’re hearing an alarming number of examples of AI going rogue. Last month, OpenAI revealed six new cases of “unexpected or concerning” behavior of its AI models, including making up data and moving files onto the internet without permission. We also learned about an incident that involved the University of Toronto and the frightening news that an AI-generated report had falsely claimed a Chinese ship carrying nuclear materials was en route to Iran.

This is worrisome. It appears AI is breaking away from its controllers at an alarming rate. But President Trump seems more worried about China beating the U.S. to AI supremacy than in warnings from industry leaders that we could be facing a threat to our survival.

It’s like we’re witnessing a rerun of the nuclear arms race, with even higher stakes!

Mega-cap tech update

Tech giants are spending hundreds of billions of dollars to commercialize AI in any way they can. It’s estimated that over $1 trillion had been spent on research and development to date. By 2030, that figure could rise to $5 trillion plus. This is speeding up the whole process and increasing the risk of rogue behaviour that could lead to disastrous results.

Most major tech companies are committing huge sums to AI development. Here are updates on some of the tech majors and their involvement in AI. (All are tracked in my Internet Wealth Builder newsletter).

NVIDIA Corp. (NSDQ: NVDA). NVIDIA made its name with the graphic processor units used in gaming systems such as Microsoft’s XBox, but it is now the primary engine behind the global artificial intelligence revolution. It provides the essential chips, software platforms, and data centre infrastructure required to build and run modern AI systems.

The stock started the year slowly, then shot up to almost $410 in June. It has been trending downward since but is still ahead about 18% year-to-date.

If the AI boom continues, NVIDIA will continue to grow at an unprecedented rate as the primary beneficiary of the AI science. But if it slows or is hit by government regulation, the share price could plunge.

Amazon.com Inc. (NSD: AMZN). Amazon.com is a global leader in e-commerce and cloud computing, with its Amazon Web Services (AWS) division driving significant growth and innovation. The company’s scale and technology investments continue to set it apart in retail, logistics, and digital services.

The shares reached an all-time high of $287.20 in July but then went into a slide along with the rest of the tech sector, and has been trading around $250 since then.

AWS AI Services and AI innovation at Amazon are building massive infrastructure, foundational models, and internal agentic application. The company has invested $50 billion in OpenAI, a deal that raised eyebrows when it was announced last February. The arrangement gives Amazon an equity stake of about 5% in OpenAI. Amazon has also invested $13 billion in Anthropic, with an agreement that allows the total commitment to rise by an additional $20 billion. That brings the potential total to $33 billion.

Third-quarter net sales are expected to be between $197 billion and $202 billion, or to grow between 9% and 12% compared with third quarter of 2025. Operating income is expected to be between $22.5 billion and $26.5 billion, compared with $17.4 billion last year.

Amazon’s p/e is a reasonable 20.45x. Plus, the huge investments it is making in AI seems to be paying off. That said, the stock has been trending down for almost two months. For those who own the stock, it’s a hold.

Alphabet Inc. (NSD: GOOGL). Alphabet is the parent company of Google, YouTube, Android, Chrome, Waymo, and a variety of other leading-edge, high-tech ventures.

The stock started the year in a downtrend, then rallied to an all-time high of $408.61 in June. It’s been drifting down recently, although it’s still ahead about 12% year-to-date.

Alphabet is investing huge amounts of money in AI, which has weighed on its share price. The company expects to spend between $195 billion and $205 billion on capital expenditures in 2026, driven overwhelmingly by technical infrastructure for artificial intelligence.

Alphabet spent $45 billion in the second quarter alone, double the amount spent during the same period in 2025. SEC filings indicate that Alphabet has committed an additional $811 billion in future spending, largely earmarked for AI infrastructure.

Alphabet is using artificial intelligence to power its core consumer products, scale enterprise cloud services, and build massive underlying computing infrastructure. For example, Alphabet is embedding its Gemini AI model across Android devices, cars, TVs, watches, and core apps like Google Search and YouTube.

The company is making a huge bet that its investments in AI will pay off. The jury is still out on whether they are right.

Apple Inc. (NSD: AAPL). Apple’s iPhones and iPads dominate the market, making it one of the most valuable companies in the world, with a market cap of almost $5 trillion. The company has about 150,000 employees.

After a mid-summer slump, the stock has rallied but is trading below its all-time high of $344.57.

Apple mainly uses AI to enhance the performance of Siri, its conversational search device. An enhanced version of Siri was unveiled earlier this month, but critics say it lacks the power and functionality of competing products.

The company has not invested in AI on the same scale as some of the other major players. The money it has spent is focused on acquisitions of smaller companies with the patents and skills to improve its own products. One of its largest deals, in February of this year, was the purchase of Israeli start-up Q.ai for between $1.6 billion and $2 billion. Q.ai specializes in machine learning that interprets speech through audio and subtle facial cues.

Apple warned that supply constraints would weigh on near-term growth, shifting investor focus to how component shortages and expected price increases could affect future demand. As for AI, Apple’s commitment is low compared with the huge amounts of money being tossed around by Nivida, Amazon, and Alphabet, among others.

AI Outlook

The billions of dollars being spent by the tech industry on AI explains why some industry leaders are underplaying concerns about the dangers that the technology could develop a life and will of its own and attempt to take control of anything within its purview.

NVIDIA CEO Jensen Huang has said AI doomsday fears and calls for a development slowdown are “not grounded in science.” Instead, he argues that safety is an engineering issue rather than a legal one.

Perhaps he’s right. But if he isn’t, we could be in trouble. AI is the genie that we can’t put back in the bottle. We need to build effective safeguards now. If we fail and it decides to run amok a few years down the road, the consequences could truly be catastrophic.

Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.

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Notes and Disclaimer

Content © 2026 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.

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