--- title: "Is the Tech Stock Collapse Related a Sign of the AI Bubble Popping?" description: "Tech stocks crashed Monday morning, accelerated by a global selloff and rising concerns over slowing economic growth." date: "2024-08-05" modified: "2024-08-05" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/the-byte/tech-stocks-ai" categories: - "Artificial Intelligence" tags: - "ai bubble" - "Google" - "NVIDIA" - "the digest" --- # Is the Tech Stock Collapse Related a Sign of the AI Bubble Popping? ![Tech stocks crashed Monday morning, accelerated by a global selloff and rising concerns over slowing economic growth.]() *\Image: Spencer Platt/Getty Images\* ## Tech Nein Tech stocks crashed Monday morning, continuing [last week's global selloff]() and raising concerns over slowing economic growth. Shares of tech giant Apple [fell over four percent]() following news that Warren Buffett's Berkshire Hathaway had sold almost half of its stock in the iPhone maker. And AI chipmaker Nvidia plunged as much as 13 percent when markets opened, following [*The Information* reporting]() that its next-generation AI chips would be delayed by three months, though it rebounded to a loss of around six percent by midday. There are several factors at play, including the Federal Reserve's sluggish trajectory toward [cutting interest rates]() and a payroll report [revealing a sharp slowdown]() in the number of new jobs in the US last month. But the sharp selloff could also be indicative of growing disillusionment with the priorities of the tech industry, with [analysts becoming increasingly concerned]() that generative AI has yet to generate any significant profits despite untold billions of investment. Could this week's tech wipeout be [symptomatic of a growing "AI bubble]()" that's set to burst? It's tough to say for sure, and there are many factors at play — but there's no question that lean times for tech will tighten the timetable to profitability for AI experiments. ## Big Dipper Ever since the viral release of ChatGPT, tech giants have been pouring money into AI at a breakneck pace. [Microsoft]() and [Google]() released their second quarterly earnings last month, revealing staggering capital expenditures driven by expansions of AI data centers. But whether this major infrastructure investment will pay off in the long run remains an open question The big problem is that most AI efforts to date are positioned as freemium subscription services — but in a crowded market, customers haven't been opening their wallets at a meaningful scale. Take it all together, and it's looking possible — though by no means a sure thing — that the AI industry could be in for [yet another big freeze](). "Despite its expensive price tag, the technology is nowhere near where it needs to be in order to be useful," Goldman Sachs' most senior stock analyst Jim Covello wrote in a [report]() last month. Others, however, are viewing the recent dip as an opportunity. "We maintain our positive view on the AI growth story, and think that the recent share price correction offers a good opportunity," global wealth management bank UBS wrote in a [Friday note](). **More on the AI bubble:** *[Investors Are Suddenly Getting Very Concerned That AI Isn't Making Any Serious Money]()* ## 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]()