Anthropic · OpenAI · South Korea · Google · Axios
Investors may be hitting pause on the AI run-up
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Investors seem to be hitting pause on the AI run-up.
Key facts
- The tech-focused Nasdaq 100 index slid 3.3% Tuesday, while the broader S&P 500 closed 1.4% lower, after a selloff in South Korea got investors skittish about the high-flying chip stocks
- Yes, but: Demand for AI compute is still outpacing available supply by at least five or even 10 times, says Mandeep Singh, global head of technology research at Bloomberg Intelligence
- Costs can get quickly out of hand," Rahsaan Shears, AI enterprise transformation leader at the firm
- Stocks of most of the chip companies, critical to AI processing, have had triple-digit growth over the past year
Summary
They're in a bit of a reality-check moment in the AI buildout — both for the businesses blowing their budgets on compute and for the investors bidding up stock prices for any company engaged in the new technology. AI is moving faster than ever before, and the cost of some compute, or the price to rent the processing power needed to run models, is going down. But prices to run the flagship frontier models from OpenAI and Anthropic are far more costly. Stocks of most of the chip companies, critical to AI processing, have had triple-digit growth over the past year. The tech-focused Nasdaq 100 index slid 3.3% Tuesday, while the broader S&P 500 closed 1.4% lower, after a selloff in South Korea got investors skittish about the high-flying chip stocks.