Some of the biggest spenders in AI are Microsoft, Amazon, Alphabet, Meta, Nvidia, and Oracle. Those six stocks represent about 27% of the S&P 500. If those stocks pull back 50-75% on average during the down leg of this capital cycle

Well, maybe. I suspect there will be some pull back if/when AI doesn't deliver as much as expected. However, let's look at it individually. If Googles spending of $100B on AI is for naught, and had ZERO return, how much do you think the stock would go down? Would it go down 75%? Probably not. Google is still primarily an advertising company and still derives most of its revenue/profit from advertising.

Or take Meta for example. Let's say they invest $70B in metaverse, and it all comes to naught, no real return. What will happen to the stock over the next few years? Or in this case, what happened?

JP Morgan recently estimated that 41 AI-related companies make up 47% of the S&P 500’s market capitalization.

"AI related" is a very nebulous term. You could even say that ALL companies are AI related because they are potential customers of AI or AI-related services.