CNBC's Squawk Box Asia anchors Martin Soong and Chery Kang take a look at the rotation out of big tech on Wall Street, and what's driving concerns about the current AI boom.

Wall Street

Several major U.S. technology companies, including AI software provider Palantir, have seen significant declines in their stock prices amid concerns that enthusiasm for artificial intelligence may be overblown. Palantir's stock, despite doubling in value earlier in the year due to AI optimism and government contracts, has dropped for multiple sessions in a row. Industry voices, such as OpenAI CEO Sam Altman, have compared the current AI investment climate to the dot-com bubble, warning that investors may be too optimistic and could face disappointment.

Additional factors contributing to market unease include research suggesting that most organizations are not yet seeing returns from their investments in generative AI. Meanwhile, companies like SoftBank continue to invest heavily in AI, and the U.S. government is considering strategic stakes in chipmakers like Intel. Despite ongoing investments, some traders remain uncertain about the timing and potential for monetization in the AI sector.

U.S. big techs selling off on worries that AI hype overblown

AI software provider Palantir slumping for the fifth session in a row down more than nine percentage rate overnight. The stock though has doubled this year thanks to AI enthusiasm and also success scooping up government contracts. But the AI hype is, looks like, certainly looks like it's getting tested. Even Sam Altman, one of the leading architects of the AI boom, OpenAI, of course, hinted that things may have gone too far. The OpenAI CEO comparing today's situation to the dot-com bubble of the late 90s in an interview with The Verge warning investors have been overexcited and may need to brace themselves for disappointment. What do you think, Sherry Kang? And I think it's definitely bad timing for Sam Altman to say that when the market is just very stressed out, obviously ahead of the Jackson Hole speech by Jay Powell and, you know, when the overall market is really stressing out over, you know, growth versus inflation trade-off and now we've got Sam Altman sort of throwing cold water or hot water over this AI trades here. I think some parts of AI space, it could be looking bubbly or a little too crowded, let's call it that, because we've got, you know, trades like copper, power transformers, cooling semis. They had a good run but, you know, what went up must come down. But that doesn't mean the whole AI narrative is dead, right? So, let's see. I think it's really the timing issue for the markets. Yeah, it could be, right? And there are cycles. What comes up must come down. There's gravity as well. But, you know, we're going to be talking a lot more about what SoftBank is doing a little later on in the show. That's the story that CNBC's Lin Lin is working on feverishly right now. You mentioned SoftBank taking that two billion dollar bet or investment in INTC plus the Trump administration is looking at taking a 10% stake there through a, I guess, a swap of chip grant money for equity. So, it seems like even though SoftBank has been criticized for being late to the AI party, it seems to be trying to make it up pretty quickly. It's not just INTC, right? You've got Stargate. You've got a number of other very significant and heavy AI investments on the part of SoftBank too. So, Massasone is still bullish AI, it looks like. Yeah, and, you know, Intel's overnight trade definitely shows that sovereign put for the company, right? And we heard from, you know, the Trump administration, we have been hearing from the Trump administration, basically on-shoring of some of these key materials, you know, chips that they need to make in the United States. And if that's the idea, then perhaps the whole valuation around Intel should be thrown out the window and really look at things from, you know, through the geopolitical lens as well. Although some traders, Marty, did talk about what led to that, to pull back in overnight session. Some were talking about this, you know, MIT unit researchers talking about how 95% of organizations are getting zero return from their investments in generative AI. So, maybe research like that could spook some people out there. And this is something that we've been talking about for some time now, monetization. Maybe we're not there just yet, maybe we're still in the cycle of a scaling up, and maybe the CapEx is the trade at the moment. But I think, you know, some confused traders out there really trying to figure out where in this AI cycle that we're right now. Yeah, I mean, it always happens, right, in every sort of investment cycle. At some stage, there's got to be payback, there's got to be show me the money, and we may not be quite there just yet.

Israel's military has called up tens of thousands of reservists in preparation for an expected assault on Gaza City, as the Israeli government considered a new proposal for a ceasefire after nearly two years of war.

Jerusalem

Middle East Conflict

Israel calls up 60,000 reservists ahead of Gaza City operation

The Trump administration says it is adding 407 items to the list of "derivative" steel and aluminum products subject to higher tariffs. The list includes products like car parts, household appliances, baby strollers, fire extinguishers and spray deodorants.

Washington

Global Tariffs

Trump expanding steel and aluminum tariffs

NATO military chiefs met virtually Wednesday for what was described as a candid discussion about security guarantees the alliance would be willing to provide to Ukraine in an effort to end Russia's war in the region.

Brussels

Ukraine Invasion

NATO chiefs meet virtually about potential Ukraine security guarantees

Israel's military leaders approved the next phase of their ongoing offensive in the territory. The operation will shift focus to Gaza City, targeting areas where Hamas is believed to still be active and where Israeli forces have not yet operated.

Israel approves next phase of Gaza offensive, focus on Gaza City

Despite not making landfall, Hurricane Erin is forcing mandatory evacuation orders in parts of North Carolina and is expected to cause rip currents for days along the U.S. East Coast.

North Carolina

Hurricane Erin forces evacuations on U.S. East Coast

The White House says it is working to secure a meeting between the presidents of Russia and Ukraine, which both have agreed to, while plans continue to create security guarantees for Ukraine.

Trump says no U.S. ground troops will be sent to Ukraine

Hamas has agreed to a ceasefire proposal for Gaza, but mediators are still waiting for an official response from Israel. CBS News contributor Robert Berger has the latest from Jerusalem.

Mediators await Israeli response to Gaza ceasefire proposal

Indian Prime Minister Narendra Modi met China’s top diplomat on Tuesday and hailed the “steady progress” made in improving the bilateral relationship after a yearslong standoff between the nuclear-armed Asian powers.

New Delhi

India's Modi meets China's foreign minister to rebuild ties

Texas Democrats who ended a walkout found themselves shadowed by law enforcement officers to keep them from repeating the protest that stalled Republican efforts to redraw congressional districts and fulfill President Donald Trump's desire to reshape U.S. House maps.

Austin

Police escort Texas Democrats to prevent new redistricting walkout

Air Canada has reached a tentative agreement with the Canada Industrial Relations Board (CIRB), ending the strike that began over the weekend involving 10,000 members and disrupted travel for more than 100,000 travelers per day.

Toronto

Air Canada reaches tentative agreement with flight attendant union

Exiled former Hong Kong lawmaker Ted Hui hailed Australia's grant of asylum status as a key acknowledgement of the territory's human rights infringements since its authorities quelled massive pro-democracy protests in 2019.

Hong Kong Island

Ex-Hong Kong lawmaker granted asylum by Australia

Forecasters are giving urgent warnings to millions of people who live along the East Coast as Hurricane Erin churns in the Atlantic. The storm will not make direct landfall but is expected to bring dangerous rip currents.

East Coast of the United States

Hurricane Erin to bring dangerous rip currents to U.S. East Coast

Jasveen Sangha, a Los Angeles woman known as the "Ketamine Queen," has agreed to plead guilty to federal charges in connection with the death of actor Matthew Perry. Sangha could face up to 45 years in prison.

Los Angeles

"Ketamine Queen" to plead guilty in Matthew Perry's death

European leaders who converged on the White House for talks on the Russia-Ukraine war demonstrated a united front regarding Ukraine's security on Monday, underscoring the issue as pivotal for the entire continent, not just Ukraine.

EU leaders show cautious optimism following Zelenskyy, Trump talks

As Hamas reportedly agreed to some ceasefire terms that would include the return of more hostages, Israeli Prime Minister Benjamin Netanyahu ordered troops to take more of Gaza.

Israel digs in on Gaza takeover as Hamas softens on ceasefire

President Donald Trump said that the United States would help Europe in providing security for Ukraine as part of any deal to end Russia's war in Ukraine.

Trump tells Zelenskyy U.S. would help with security in a peace deal

Bolivia's presidential vote headed to an unprecedented runoff after elections Sunday that ended more than two decades of left-wing dominance in the Andean nation but signaled voters' trepidation about a major lurch to the right.

La Paz

Bolivia heads to runoff after historic defeat for the left

All Air Canada planes were grounded on Monday (August 18) after its 10,000 flight attendants refused a return-to-work mandate from the Canadian government.

Air Canada delays plans to resume operations

Ukrainian President Volodymyr Zelenskyy arrived at the White House Monday (August 18) for his meeting with President Donald Trump and other European leaders about Russia's war in Ukraine. CBS News White House reporter Taurean Small has more.

Trump meeting with Zelenskiy, European leaders at White House

Hamas on Monday informed mediators that it had accepted a ceasefire deal proposal submitted to it the day before, according to international and Israeli outlets.

Reports: Hamas accepts latest Gaza ceasefire proposal

Hurricane Erin will bring dangerously rough surf to parts of the U.S. East Coast. Over the weekend, Erin's outer bands lashed Puerto Rico with up to 7 inches of rain and flooding parts of the island.

Erin expected to bring dangerous conditions to U.S. East Coast

Ahead of his Monday meeting with President Trump, Ukrainian President Volodymry Zelenksyy says his country will not give up any territory to Russia, even as the White House insists potential land swaps will be necessary. Willie James Inman reports.

Kyiv

Ahead of Trump meeting, Zelenskyy says won't give territory to Russia

Thousands of Israeli protesters demanded a deal to secure the release of hostages still held by Hamas in one of the biggest demonstrations since the war in Gaza began. Debora Patta reports.

Thousands of Israelis protest in Gaza, call for end to fighting

Ukrainian President Volodymyr Zelenskyy flies to Washington on Monday under heavy U.S. pressure to agree to a swift end to Russia's war in his country, but determined to defend Kyiv's interests — without sparking a second Oval Office dust-up with Donald Trump.

Zelenskyy, European allies to meet with Trump to discuss peace

European leaders voiced strong support for Ukraine ahead of a Washington summit with U.S President Donald Trump. They emphasized unity, territorial integrity and security guarantees as essential to any peace deal.

Paris

European leaders stress unity with Ukraine ahead of peace talks

International condemnation and pressure from allies have done nothing to stop Israel's plan to displace the people of northern Gaza. Israel on Saturday (August 16) said it is preparing to move Palestinians from combat zones to southern Gaza.

Israeli military prepares to move Palestinians to southern Gaza

Thousands of people took to the streets on Sunday in a nationwide strike amid fears further fighting could endanger the 50 hostages believed to still be in Gaza.

Tel Aviv-Yafo

Dozens of Israelis arrested in protest to demand end to Gaza war

Russia continues to target Ukrainian cities firing hundreds of missiles and projectiles daily despite ongoing peace efforts, led by the United States. Ukrainian officials say their unwillingness to dial back their offensive reflects their lack of sincere interest in peace.

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