US tech stocks tumble on AI bubble fears
The tech-heavy Nasdaq fell by 1.8pc in early trading on Wednesday, leaving the index down more than 7pc so far this week in the worst sell-off since April. Elsewhere on Wall Street, the S&P 500 also fell by 1pc as markets opened.
The drop-off has been fuelled by concerns that AI companies are overvalued, with some claiming they have little to show for the billions of pounds of investment that have been ploughed into companies such as OpenAI.
Shares in Nvidia, the world's largest company with a $4 trillion valuation, fell by 3.3pc in early trading on Wednesday, before recovering slightly. The technology giant, which makes the chips that power vast AI data centres, is down 6pc so far this week.
Shares in Palantir, the US data business and defence contractor, also sank by 6pc on Wednesday and are down by around a fifth over the past week. Shares in Arm, the UK chipmaker, dropped by 4.6pc.
It comes after a report from researchers at MIT suggested that 95pc of corporate AI projects are so far generating 'zero return' for businesses.
The latest fall also coincides with market jitters ahead of Jerome Powell, chairman of the Federal Reserve, delivering a speech to central bankers at Jackson Hole on Friday.
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