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Tech News
A tech commentator argues that recent declines in AI-related stocks signal the end of unchecked hype following the US elections, noting this is the first time an AI stock downturn has occurred. The author contends Silicon Valley has built costly AI products without widespread public affection, unlike earlier free consumer tech innovations.
A newspaper opinion column contends that what people call stock-market bubbles are not cases of irrational exuberance correcting itself, but rather markets resolving genuine uncertainty about the future. The author draws a parallel between current market conditions and the dot-com era of 1999 to make this case.
US stock markets saw sharp declines on Thursday, with the Nasdaq hit hardest among indices tracking major tech firms including Alphabet, Nvidia, Meta and Apple. The sell-off followed this week's midterm elections, in which Democrats secured sweeping wins that give the party full control of Congress. Several prominent Democratic candidates had campaigned on curbing the unchecked growth of data centres that support AI development.
Global equity markets fell sharply after US stocks lost about $3.2tn in value overnight, with the Nasdaq down 5.5%, the Dow off 3.44% and the S&P 500 down 4.36%. Chipmakers tied to the AI boom were hit hardest, with SanDisk down 22% and Micron and AMD each losing 17%, while Asian indices including Japan's Nikkei, South Korea's KOSPI and Taiwan's TAIEX followed with steep declines.
At the 2026 Global Financial Leaders' Investment Summit in Hong Kong, PIMCO CEO Emmanuel Roman said the AI market faces a downturn where 'things are going to break,' estimating the AI buildout could require $2 trillion in financing over five years against a $12 trillion total US bond market. Apollo Global Management president Jim Zelter echoed caution, saying uncertainty remains over how AI pricing and economics will evolve, even as he expects computing demand to keep rising.
In an interview, New York mayoral candidate Zohran Mamdani said he would push one of the most comprehensive school AI moratoriums in the US, barring generative AI use for students from kindergarten through eighth grade. He compared the current hype around AI to the 2008 housing bubble and said he does not trust AI industry leaders like Sam Altman to self-regulate.
In a perspective piece, Matt Scherer, co-author of a report on AI financial risk, argues the SEC should block Anthropic's upcoming initial public offering. He points to the company's IPO registration statement, which discloses nearly $900 billion in spending commitments extending into the 2030s alongside unaudited 2026 financials showing revenue growth slowing sharply in the third quarter.
The Wall Street Journal reports that major AI companies are investing in smaller startups that use the same funds to buy services back from those large firms, creating interlinked financial dependencies. The report notes Alphabet recently suffered its largest-ever single drop in market value, wiping out more than half a trillion dollars, while data-center operator CoreWeave has also seen declining shares over recent months.
Neocloud companies like CoreWeave and Nebius, which lease computing capacity to AI developers such as Anthropic, OpenAI and Meta, have become a focal point of investor anxiety over the AI sector's financial health. Gartner projects 80% of neocloud firms will stop operating independently by 2030, while Forrester expects at least three to be acquired soon as their finances weaken. Treasury Secretary Scott Bessent pushed back on the concerns, telling CNBC that neoclouds are only a small, external part of the broader economy.
Crypto commentator Raoul Pal posted on X that exponential growth in AI, robotics, energy and crypto will outpace existing economic and governance systems within roughly four years. He argued that wage stagnation and currency debasement are already straining workers, and that AI-driven change will make information harder to trust and alter what running a business even means. The post was tied to promotion of his podcast and book.
Reps. Greg Casar and Maxine Waters led a group of House Democrats in introducing a resolution warning that an AI-related asset bubble poses economic risks, and stating opposition to any taxpayer bailout of corporations or executives if that bubble collapses. The resolution instead calls for aggressive federal action to protect workers, retirees and low-income communities from resulting economic harm, and was co-sponsored by a dozen other House Democrats.
US tech stocks fell sharply on Friday, with the Nasdaq 100 down 2.6% and on pace for a roughly $1 trillion decline. Amazon shares dropped about two percent despite strong cloud earnings, as investors focused instead on its 2026 capital expenditure plans of $220 billion tied largely to AI. The slide followed Alphabet's historic 12.6% single-day plunge on Thursday, which wiped out over $500 billion in market value.