Cracks are beginning to show in the stock market, as doubts grow about AI investments - NBC News
U.S. stock markets are experiencing volatility as investor confidence in AI-related investments wavers. Concerns over slowing revenue growth at major AI firms and potential oversupply in the chip market have led to a cooling of the tech-driven rally.
Why it matters
Given that tech spending has accounted for nearly half of U.S. economic growth this year, a downturn in the AI sector could have broader implications for the national economy.
Just one week after hitting fresh all-time highs, U.S. stocks are showing signs of strain as investors begin to fret about returns on the trillions of dollars that have been put into AI. For U.S. consumers, it could mean a shakier economy moving forward. After trading closed Thursday, the S&P 500 was off 1% from its week-ago record, while the tech-heavy Nasdaq had fallen more than 3% below its peak last week. Driving the declines: Quarterly revenue growth at Anthropic has slowed, the Financial Times reported Wednesday. The AI giant is expected to be worth more than $1 trillion when it goes public, and at nearly $17 billion, its revenue is still massive and the company said it is profitable. There are also rising concerns about whether China-based memory technology companies could undermine, or even overtake, their Western rivals.
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