The financial community’s trust in artificial intelligence—a sector once heralded as the cornerstone of technological progress and corporate transformation—may be entering a period of pronounced uncertainty. Companies that had once been lauded for their bold and aggressive investments in this field are now beginning to lose the confidence of investors who, not long ago, treated AI as an inexhaustible engine of future growth. According to detailed reporting by the *Financial Times*, the past week has seen approximately one trillion dollars in market capitalization erased from several of Silicon Valley’s most influential corporations, all deeply intertwined with the generative AI boom. This immense contraction in stock value has not spared giants such as Oracle, Meta, Palantir, and Nvidia—firms often cited as the architects of the contemporary AI revolution. The publication characterizes the week as Wall Street’s most punishing since the tumultuous days of what it calls Trump’s so‑called “liberation day,” emphasizing the gravity of the market’s collective recoil.
Notably, the turbulence has not been contained to the industry’s most dominant players. Smaller and more unconventional entities—companies that tried to reinvent themselves with a veneer of technological prestige—have also found themselves caught in the downdraft. Consider Sweetgreen, a salad-centric enterprise that spent considerable energy branding itself not merely as a restaurant but as a forward-thinking automation outfit that happened to sell salads as its tangible product. The firm’s attempts to integrate robotics and artificial intelligence into its operations once symbolized a fusion of culinary and computational innovation. Yet the aspirational dream of a fully automated salad empire has collapsed under financial and logistical pressures. Sweetgreen recently divested its robotics division, selling it to the startup Wonder, and its publicly traded stock has been almost entirely obliterated in value over the course of just one year—an unambiguous indicator of investors’ changing appetites.
Even the most powerful forces in global technology have not escaped the decline. Microsoft—a company whose influence and resources place it at the very pinnacle of Silicon Valley’s hierarchy—has experienced one of the harshest losing streaks in its modern history. According to data compiled by *Bloomberg*, the firm’s market value has shrunk by roughly $350 billion after its stock fell 8.6 percent over an eight-day stretch, marking its most severe slide since 2011. That earlier episode, the publication reminds readers, spanned nine consecutive trading days of losses. The comparison underscores how extraordinary this new slump truly is for a company that had come to symbolize the unshakable optimism surrounding the generative AI race.
Behind these sweeping declines lies an expanding unease about the very foundation of the AI business model. The technology’s extraordinary cost of development and deployment has opened a widening chasm between expenditure and tangible return. Operating vast data centers, training advanced models, and maintaining state-of-the-art computational infrastructure all require monumental financial outlays that, thus far, have not translated into dependable profits. *Bloomberg* observes that Wall Street’s tolerance for this imbalance may be wearing thin: Microsoft, for instance, reported nearly thirty‑five billion dollars in spending during its last fiscal quarter. Despite robust indicators—such as stronger-than-expected growth in its Azure cloud computing division—many investors view the relentless funneling of capital into AI as a troubling exercise in hope rather than prudence. Since the company’s late-October earnings disclosure, *Bloomberg* notes, Microsoft’s stock has not recorded a single positive session, reflecting simmering skepticism about whether this massive investment will ever justify its cost.
The pessimism, however, cannot be entirely attributed to AI alone. These tremors in technology stocks are unfolding against the backdrop of a broader economic malaise that some commentators have rather colorfully described as a “financial quagmire” or worse. Because official government data remains temporarily inaccessible owing to the ongoing shutdown, analysts have turned to private-sector indicators—which collectively paint an increasingly dismal picture of the national economy. A recent analysis from the career transition and workforce consultancy Challenger, Gray & Christmas revealed that job losses in October were the most severe for that month in more than two decades, reaching levels not seen since 2003. The technology sector once again led the bloodletting: Amazon alone accounted for approximately fourteen thousand layoffs, highlighting the sharp retrenchment in a field that, until recently, could scarcely hire fast enough.
Further compounding this sense of economic fragility, a monthly survey conducted by the University of Michigan found that American consumer sentiment is plummeting to near-historic lows. The study’s director, Joanne Hsu, attributed the decline to mounting anxiety over the prolonged government shutdown and the possibility of prolonged negative consequences for both the national economy and household stability. According to Hsu, the erosion in optimism cuts across all major demographic and political categories—young and old, affluent and working class, conservative and progressive alike—revealing a rare consensus that financial insecurity is becoming the dominant emotion of the present moment.
Thus we arrive at the paradoxical reality of what some sarcastically dub the “greatest economy ever.” In this supposed new “Golden Age,” opportunities for employment are scarce, the cost of living continues to escalate, and an unmistakable undercurrent of fear permeates public consciousness. Beneath the glossy rhetoric of innovation and prosperity lies a populace grappling with uncertainty, while markets that once thrived on unbridled enthusiasm for artificial intelligence are now struggling to reconcile ambition with sustainability. It is a sobering reminder that technological revolutions, no matter how dazzling their promise, remain inextricably bound to the unpredictable tides of economic confidence and collective belief.
Sourse: https://gizmodo.com/1-trillion-in-tech-stocks-sold-off-as-market-grows-skeptical-of-ai-2000683226
