Is AI facing a big financial reckoning?
Summary
Shares of companies that make computer chips used in artificial intelligence (AI) have fallen sharply in the last month. Investors are worried that the recent fast growth and high spending on AI technology might slow down or not bring enough profit soon.Key Facts
- Shares of South Korean chip makers SK Hynix and Samsung dropped 46% and 35% in one month.
- US chip makers Micron and Intel saw their shares fall 28% and 35% recently.
- A Chinese company’s new chip manufacturing breakthrough raised concerns about competition in chip supply.
- Big AI companies like Meta, Alphabet, and Open AI are facing pressure to make enough money to cover their high chip and data center costs.
- Meta’s shares fell 15% in the last month; SpaceX shares also dropped significantly after its recent stock market debut.
- Apple’s shares rose 21% as it has stayed mostly out of the AI chip race.
- Some governments are limiting new data centers because they use a lot of water and energy.
- Investors are cautious but some tech investors believe the current slowdown is a normal correction after big gains last year.
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