US tech stocks slide after Altman warns of ‘bubble’ in AI and MIT study doubts the hype

Beatrice Nolan is a

Investors’ long-running enthusiasm for artificial intelligence showed signs of faltering late Tuesday and early Wednesday morning as tech stocks tumbled. Nasdaq 100 futures were off 0.2% this morning, premarket.

Nvidia, fresh off becoming the world’s first $4 trillion company, sank 3.5%, while Palantir slid nearly 10%. The sell-off appeared to be sparked in part

And while the MIT study attributed failures to corporate “learning gaps” and flawed integration rather than actual AI model quality, the market reaction highlights growing concerns about AI’s commercial viability.

The Nasdaq logged its steepest drop since August, and the rout quickly spread overseas. Korea’s SK Hynix, one of Nvidia’s key suppliers, lost 2.9%, while chip giant TSMC slipped 4.2%. SoftBank, long bullish on AI, cratered more than 7%. However, Alibaba and Tencent barely dipped, and China’s chipmaking champion SMIC even popped 3%.

“Tech stocks were under pressure yesterday, led

Concerns that investment in AI is racing ahead of sustainable growth are not new. High-profile figures, including Alibaba cofounder Joe Tsai and Bridgewater Associates founder Ray Dalio, have cautioned against the pace of the boom.

Dalio has also likened today’s Wall Street cycle to the run-up to the dotcom crash of the late 1990s. “There’s a major new technology that certainly will change the world and be successful. But some people are confusing that with the investments being successful,” he told the Financial Times earlier this year.

Others see the risks as even greater. Apollo Global Management chief economist Torsten Slok argued last month that the AI surge could eclipse the internet bubble of the 1990s, pointing out that the 10 largest companies in the S&P 500 are now more overvalued relative to fundamentals than they were at the height of the dotcom era.