Aug 03, 2024 05:40 PM IST
Jeff Bezos’ wealth slumped by more than $21 billion after Amazon planned to continue spending big on AI even at the expense of short-term profits.
Jeff Bezos’ wealth slumped by more than $21 billion after Amazon.com Inc. said it planned to continue spending big on artificial intelligence even at the expense of short-term profits.
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Shares of the online retailer fell as much as 13% Friday, dropping Bezos’ net worth to $185.3 billion, according to the Bloomberg Billionaires Index. The one-day wipeout is second only to his loss on April 4, 2019, when the Amazon co-founder’s net worth tumbled $36 billion following his divorce settlement.
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On Thursday, Amazon reported second-quarter revenue that fell short of analysts’ estimates, with strong cloud computing offset by weakness in its main e-commerce business. Chief Executive Officer Andy Jassy has been waging a cost-cutting campaign to free up resources to invest in AI even as investors are worried the company’s capital expenditure burden could dampen profits.
Red flags have been waving for big tech as investors express fears that AI-fueled gains are overdone or the market is too concentrated. Some high-profile earnings disappointments, along with uncertainty over the size and timing of possible Federal Reserve rate cuts, have helped plunge the Nasdaq 100 Index into correction territory, wiping out more than $2 trillion in value in just over three weeks.
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Nvidia Corp. and Tesla Inc. are down more than 20% from recent highs, though both remain up for the year. Technology billionaires in total saw $68 billion carved from their fortunes as of 12:33 p.m., according to Bloomberg’s wealth index.
Bezos, 60, the world’s second-richest person, has been steadily offloading Amazon shares this year. He sold stock worth about $8.5 billion over nine trading days in February. And on a day last month when Amazon hit a fresh record, he disclosed a plan to sell 25 million additional shares worth $5 billion.
The additional sales would bring his total this year to roughly $13.5 billion, according to Bloomberg’s calculations. He would still hold almost 912 million shares, or about 8.8% of Amazon, once those sales are complete.
His wealth also derives from space-exploration company Blue Origin and the Washington Post.
