Financial markets saw a sharp sell-off on Tuesday as investors grew increasingly concerned about a potential bubble in the artificial intelligence (AI) sector. All of the so-called “Magnificent Seven” tech giants – Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla – saw their stock prices fall, following heavy losses in Asia overnight.
The tech-heavy Nasdaq index was down 1.5% in mid-morning trading in New York, while the S&P 500 and Dow Jones were both more than 1% lower. It marks the second day of heavy selling of technology stocks in the US and extends a fall over the past month, as investors fret about a possible AI bubble bursting.
Sundar Pichai, chief executive of Google’s parent company Alphabet, told the BBC there was some “irrationality” in the AI boom and said “no company is going to be immune, including us” if a bubble were to burst. A Bank of America survey also found a record number of fund managers believe tech companies are “overinvesting” in AI.
The sell-off has hit the share prices of some of the world’s top technology companies, including Microsoft, Amazon and Nvidia, which saw their stock prices fall by up to 3% earlier on Tuesday. The broader market decline comes amid growing concerns that valuations in the AI sector have become overheated.
