"At the heart of the stock stumbles, there appears to be a growing anxiety about the AI business, which is massively expensive to operate and doesn’t appear to be paying off in any concrete way."
I wonder if this is a thing the U.S. should be worrying about with regard to China taking the lead. As long as the U.S. is … idling … it seems it could catch up—if in fact there is any there there with AI.
But I've been told by Eric Schmidt and others that AGI is just around the corner—by year's end even. Or, it is already being demonstrated in the lab, but we just don't know about it yet.
It seems like AI companies have grown skeptical too. The recent spate of browser releases and OpenAI launching a social network suggests to me that they’ve hit a dead end for now and are falling back on tried and true methods of monetizing.
I've had a few people ask how they should shift their 401K mix to avoid the AI bubble. I honestly don't know what to tell them (aside from the fact I am not in any way a financial advisor). Everything seems exposed.
This headline is wildly inaccurate. $1 trillion in tech stocks were not "sold off." Rather, the collective market caps of some tech stocks dropped by $1 trillion.
Market cap is mostly a useless number. It's the current stock price multiplied by the number of outstanding shares. But only a small % of shares are bought and sold in a given day, so the current stock price is mostly irrelevant to the shares that aren't moving.
If you hold some stock, and the current stock price goes down, but you don't sell your stock, then you haven't lost any actual money. The so-called "value" of your stock may have dropped, but that's just a theoretical value. Unless you're desperate to sell now, you can wait out the downturn in price.
"$1 trillion in stock value has been wiped from several of Silicon Valley’s heaviest hitters, all of which are heavily enmeshed in generative AI. Oracle, Meta, Palantir, and Nvidia"
I just checked the stock Oracle Palantir and Nvidia and they don't seem particularly down. Only Meta seems down from 750$ to 620$ which is a 21% drop (to the value it had this year in April 2025 (which would be a drop in 277B$ billions dollars).
Is there any data supporting the article claims for 1T$ stocks value drop?
I swear, we need better ways to control the superrich. They are milking us dry here. There is a reason why a certain president is constantly associated with the naughty terms "insider trading".
At this point, the inequality is so far off the rails that I don't see any way to harmonise these 2 ways of existence — ‘normal’ people are completely alien to the ultra-rich.
If wealth accumulation is your way of life, why bother with the well-being of the plebes? I'm genuinely curious as to what solutions could there be. These people are, quite frankly, not within our realm of reality anymore.
__ As __ is a journalism term to imply to uncareful readers that two events are connected, without actually saying it. But it just means they observed them at a similar time.
> There are also companies like Sweetgreen, the salad company that has tried to position itself as an automation company that serves salads on the side. Indeed, Sweetgreen has tried to dabble in a variety of tech, including AI and robots
> And then there’s Microsoft, which—despite being one of the most powerful and prominent companies in Silicon Valley—seems to be having one of its biggest losing streaks ever. Bloomberg reported Friday that its stock had slumped 8.6 percent over eight days, a decline that evaporated some $350 billion in market valuation.
I find it strange and upsetting when articles talk about the "evaporation" of "market valuation". Market value is already meaningless vapor - it's not like real money was created when the stock price went up, nor has anything of concrete value disappeared.
If an OpenAI bailout happened, I’m guessing it wouldn’t be in the context of bankruptcy restructuring (like GM in 2008 crisis). So it wouldn’t really solve anything, it would just be taxpayers buying high on a distressed asset
I see headlines like this and always wonder how they establish causation. How do they know AI skepticism is the cause of a sell off? Is this an assumption or is there reasonable evidence of causation?
Everyone uses AI today for pretty much everything but we're in a bubble... Yeah sure. Big tech with all time revenue and profits, with growing demand for compute quarter after quarter, but we're in a bubble ... Yeah sure.
OpenAI loses billions, that's true. That doesn't mean we're in a bubble. They also make billions. If their losses continue, they will keep losing more and more control. Microsoft already owns 30% of OpenAI. Big tech companies have too much cash on their hands and they cannot acquire their competitors, so instead they invest money in them. Either way, it's called consolidation.
Gizmodo is just regurgitating this Financial Times article into a poor quality opinion piece. Journalism is preferred to someone ranting from an armchair IMO.
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[ 4.6 ms ] story [ 87.6 ms ] threadI wonder if this is a thing the U.S. should be worrying about with regard to China taking the lead. As long as the U.S. is … idling … it seems it could catch up—if in fact there is any there there with AI.
But I've been told by Eric Schmidt and others that AGI is just around the corner—by year's end even. Or, it is already being demonstrated in the lab, but we just don't know about it yet.
Now, with rates falling, they can pivot the story - call it an AI bubble, let it crash
then use the crash as justification for renewed, open money printing
Market cap is mostly a useless number. It's the current stock price multiplied by the number of outstanding shares. But only a small % of shares are bought and sold in a given day, so the current stock price is mostly irrelevant to the shares that aren't moving.
If you hold some stock, and the current stock price goes down, but you don't sell your stock, then you haven't lost any actual money. The so-called "value" of your stock may have dropped, but that's just a theoretical value. Unless you're desperate to sell now, you can wait out the downturn in price.
Tech stock market capitalization declined by $1T.
Every share of stock sold by one party was purchased by another party, as always.
I just checked the stock Oracle Palantir and Nvidia and they don't seem particularly down. Only Meta seems down from 750$ to 620$ which is a 21% drop (to the value it had this year in April 2025 (which would be a drop in 277B$ billions dollars).
Is there any data supporting the article claims for 1T$ stocks value drop?
If wealth accumulation is your way of life, why bother with the well-being of the plebes? I'm genuinely curious as to what solutions could there be. These people are, quite frankly, not within our realm of reality anymore.
> There are also companies like Sweetgreen, the salad company that has tried to position itself as an automation company that serves salads on the side. Indeed, Sweetgreen has tried to dabble in a variety of tech, including AI and robots
Please just make me a good salad.
I find it strange and upsetting when articles talk about the "evaporation" of "market valuation". Market value is already meaningless vapor - it's not like real money was created when the stock price went up, nor has anything of concrete value disappeared.
No matter what, LLM'S are here to stay. Companies are doing huge investments do that they can get ahead early on.
Will it need to be more efficient, yes.
But a lot of money of repetitive tasks are going to llm's. Additionally, most companies are constraint by capacity atm.
I really can't imagine what could revert this trend.
Yes, body shops like Palantir are hugely overrated.
But the big tech? No. They can carry those infra investments. Just curious who will come out on top.
OpenAI loses billions, that's true. That doesn't mean we're in a bubble. They also make billions. If their losses continue, they will keep losing more and more control. Microsoft already owns 30% of OpenAI. Big tech companies have too much cash on their hands and they cannot acquire their competitors, so instead they invest money in them. Either way, it's called consolidation.
Gizmodo is just regurgitating this Financial Times article into a poor quality opinion piece. Journalism is preferred to someone ranting from an armchair IMO.