--- title: "Dark Clouds Suddenly Gathering Over AI Industry" description: "A major tech selloff is shaking up Wall Street as the gulf between AI company valuations and their lagging revenues continues to grow." date: "2025-11-13" modified: "2025-11-13" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/artificial-intelligence/dark-clouds-gathering-ai-industry" categories: - "Artificial Intelligence" - "Finance" - "Future Society" - "Investing" - "Meta" - "OpenAI" --- # Dark Clouds Suddenly Gathering Over AI Industry ![A major tech selloff is shaking up Wall Street as the gulf between AI company valuations and their lagging revenues continues to grow.]() *Getty / Futurism* A major tech selloff is shaking up Wall Street as the enormous gulf between AI company valuations and their lagging revenues continues to grow. As the [*Wall Street Journal* reports](), the stock market has been showing marked signs of "fragility," with Nvidia slipping seven percent last week. Despite signs of an end to the ongoing federal shutdown buoying up some excitement, the AI chipmaker continued its plunge this week, sliding another three percent on Tuesday. Meta shares have also fallen almost 17 percent since its [quarterly earnings report late last month](), despite the company beating investors' expectations. AI software giant Palantir has suffered a similar fate, dropping eight percent since [posting better-than-expected numbers]() early last week. In short, there's clearly a dark cloud gathering over the AI industry, where lofty claims of immense capabilities always seem to remain in the future, and investors are [increasingly balking]() at astronomical spending on AI infrastructure. There are growing concerns that the untold billions of dollars being spent on data center buildouts may never lead to the promised returns. Tech leaders are now [openly discussing an AI bubble]() that could plunge the United States deep into a recession if it were to pop, [economists have warned](). Adding to the uncertainty is Japanese company SoftBank, which announced this week that it had [sold off its Nvidia stake]() for $5.8 billion — money it promptly [used to bankroll different AI bets](), including heavy investments in OpenAI. SoftBank's shares slid as much as ten percent on Tuesday, following concerns that SoftBank [had to sell in order to meet exploding funding needs](). In an apparent attempt to calm spooked investors, SoftBank Vision Fund CFO Navneet Govil promised that the AI hype wouldn't lead to a disaster. "What's different between the dotcom boom and today is that AI companies are generating meaningful revenues," he told reporters, as [quoted by *Reuters*](). "There's a lot of talk about \[capital expenditures\] spend, but it's actually driven by demand." Looming in the shadows is Michael Burry, who famously shorted the US housing market before its collapse in 2008. Last week, [Burry bet over $1 billion]() that the share prices of AI chipmaker Nvidia and software company Palantir will fall, stoking further fears. Companies are already suffering [billions of dollars in losses]() as revenues continue to lag behind. While the privately-run OpenAI is playing its cards close to its chest, the Sam Altman-led firm is [planning to spend $1.4 trillion]() over the next eight years. That's despite only making around $20 billion in annual revenue today as it [continues to hunt for a meaningful business model](). But whether the latest stock market selloff is symptomatic of an impending implosion is anything but certain. Investors continue to pour billions into the AI industry, with firms announcing billion-dollar deals and plans for enormous data center projects. That's despite a notable lack of a "clear financial model for profitable AI," as the *WSJ* puts it — an enormous bet that has once bullish investors growing increasingly wary. **More on the AI bubble:** [*The Big Short Guy Just Bet $1 Billion That the AI Bubble Pops*]() ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()