Negative genai report from Nanda of MIT on the heels of Sam Altman's “bubble” comment led to a massive decline in technology stocks yesterday.
You don't have to be a genius to speculate that the current hype around the generator AI (genai) may be at the top, but this week's report from Nanda (network agents and distributed AI) at MIT and measured comments from all of the people of Sam Altman at Openai lead yesterday (August 19) and following the Tech stock on August 20th (August 19).
Nvidia's shares fell 3.5% yesterday, while Peter Thiel's Palantir fell 9.4%, according to the Financial Times, while WhiCj said overall Tech Heavy Nasdaq composite fell 1.4% in one day. As is common, this morning, Japan's Japan 225 index was down 1.5pc in Asia's market.
MIT Nanda's report found that 95% of US companies saw little or no return on investment (ROI) for Genai.
Openai's Altman only a few days ago said some investors were “very burning out” on Genai Boom. According to CNBC, it was dinner with a US reporter that Altman issued a rather disastrous warning.
“Are we at a stage where the entire investor is overly excited about AI? My opinion is yes,” CNBC reported to journalists. “Is AI the most important thing that will happen for a very long time? My opinion is yes too.”
Altman said Openai will continue to spend trillions on AI and data center construction, but he also mentioned the term “bubble” three times, raising some concerns among investors who added compound interest in the new Nanda report.
The last time Nasdaq saw a comparable slump was when Deepseek surprised the market in January with a powerful Genai offering that requires some of the computational power of some of its US equivalents, raising questions about the investment level of the large tech companies.
A new round of investment in Openai, if completed, comes when you have something comparable to space hardware at NASA, beyond the value of SpaceX, the world's most valuable private company, now, and despite the fact that SpaceX has billions in government contracts. What's not going well?
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