Name: Stocks sink amid growing concerns about AI bubble
Uploaded: 2025-11-18T23:46:44.432Z
Duration: 4 min 27 s
Description: The Dow Jones Industrial Average ended another day in the red on Tuesday, down nearly 500 points. A tech stock slump drove the losses, fueled by growing fears of an AI bubble.

The Dow Jones Industrial Average ended another day in the red on Tuesday, down nearly 500 points. A tech stock slump drove the losses, fueled by growing fears of an AI bubble.

Wall Street

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

U.S. stock markets experienced significant declines, with the Dow Jones Industrial Average closing nearly 500 points lower, primarily due to a slump in major technology stocks. The downturn was attributed to growing investor concerns about the high valuations of artificial intelligence (AI) companies and the possibility of an AI-driven market bubble.

Analysts noted that while markets remain positive for the year, the recent surge in AI-related investments—often involving a small group of interconnected companies—has raised questions about long-term profitability and sustainability. Investors are increasingly wary of the large upfront costs and circular investment patterns among leading AI firms, as well as the lack of clear evidence that current AI technologies will deliver substantial returns.

Stocks sink amid growing concerns about AI bubble

Welcome back. Let's head to Wall Street where the Dow ends another day in the red, down nearly 500 points and driving the losses is a tech stock slump fueled by growing concerns about the valuation of AI companies and fears of an AI bubble. Here's a visual representation of the S&P 500. This heat map is brought to you by Finviz and you can see a lot of those big tech companies like NVIDIA, Microsoft and Amazon, they landed in the red today. CBS News business analyst Jill Schlesinger breaks down what's driving the slump you see here. First of all, the last month or so we've had some ups, we've had some downs, but overall markets are still up on the year. So let's reinforce that. What's happening now is there are many investors who are saying that some of the big tech companies got ahead of themselves. So companies like NVIDIA, like Meta, these big companies that are spending so much money on AI, perhaps we've put too much faith in their ability to translate that into profits over the long term. That was a concern initially. So maybe we'll take those positions down a little bit. I just looked it up, by the way. NVIDIA, which was up 172% last year, is still up 35% this year. That's not bad at all. Not at all. All right. The AI spending spree has investors on edge with only a handful of key players exchanging massive amounts of money in a string of deals and investments that look increasingly interconnected. Bloomberg News created this AI spending map. And as you can see, it's a complicated web and it's fueling concerns. The AI boom is being propped up by circular investments. Joining us live is Bloomberg technology reporter Brody Ford. Brody, thank you for joining us today. Help us make sense of all of this. Can you walk us through this AI spending map? Yeah, that chart looks kind of crazy, right? You see it's five or six companies and it just feels like they're all giving each other money. And that's what's fueling the anxiety, right? It's this sense that AI is premised on some incredible payoffs on this technology going all throughout society. But for now, a lot of the money is going between the same couple of players. Today, Nvidia and Microsoft announced that they would invest in a leading AI company, Anthropic. And then Anthropic would turn around and buy a bunch of services and products from them. And this is happening a lot where leading providers are investing in their biggest customers, allowing them to purchase more. And that's giving a lot of investors a little bit of indigestion right now. Yeah. And speaking of Nvidia, a lot of these investments trace back to them and OpenAI. What concerns does that raise? Right. Yeah. So Nvidia is the biggest seller of the AI chips. OpenAI is the biggest buyer of them. So at the simplest level, each of them want to sell more and they want to buy more. And they have kind of managed to bring in a lot of the other largest companies in the economy, right? The Microsoft's, the Oracle's, the Intel's to get involved in this. And so, yeah, I think the fact that they are involved in so many of these deals does bring the concern from a lot of investors that, you know, it's two companies that are starting to get into that too big to fail territory. Hmm. OK, let's talk big picture here because we're seeing fears of an AI bubble hit the stock market hard. Why are investors so nervous right now? Does it come down to profitability concerns or even the spending frenzy? Or is it both? It's a ton of upfront costs, right? I mean, you have to go back generations to the railroads, to the interstates to get to a point where there's a comparable metric of costs. And all of this is premised on the idea that AI will be transformative. Yeah, yeah. Labor market and save tons of money. If that doesn't happen, a lot of these upfront costs are going to end up looking pretty silly. Right. And we've all used these AI tools. We can tell that they're good. They're not great. They are not they don't have a line of sight to making a true ROI right now. And so as these upfront costs get into the tens and hundreds of billions, a lot of folks are starting to wonder, God, hey, when when is the payoff actually come? Yeah, we shall wait and see, I guess. Brody Ford, thank you so much for allowing us to borrow your brain today and make sense of all this. We appreciate your time on 24-7.

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Stocks sink amid growing concerns about AI bubble

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