Investors Demand Proof of Profit as Big Tech AI Spending Triggers Stock Selloff
Major technology companies are investing trillions into artificial intelligence, but a recent market selloff indicates growing investor skepticism. Stocks for firms like Nvidia and Alphabet have tumbled as Wall Street demands concrete evidence that these massive expenditures will translate into consumer revenue. Concerns are mounting over low adoption rates, with only 3% of households paying for AI assistants. Some analysts warn of a potential bubble, citing the disappearance of stock buybacks and risks of circular financing, while others question where investors can find safety if the boom reverses.
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The economist argued the stock of ‘undiscovered embezzlement’ expands during good times. Circular financing, exaggerated profits, understated costs and hidden liabilities are recurring themes. The AI boom offers many warning signs that such behaviour is back.
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