"For one, there's the sheer speed and breadth of it. In the span of two days, hundreds of billions of dollars were wiped off the value of stocks, bonds and loans of companies big and small across Silicon Valley. Software stocks were at the epicenter, plunging so much that the value of those tracked in an iShares ETF has now dropped almost $1 trillion over the past seven days."
"For another, this drubbing, unlike many previous ones, was triggered not by fears of a bubble but rather concern that AI is on the verge of supplanting the business models of a wide swathe of companies that doomsayers have long predicted were at risk. "I don't think it is an overreaction," said Michael O'Rourke, chief market strategist at Jonestrading. "For two years, we have been talking about how AI is going to change the world and that it is a multi-generational technology.""
AI-driven selloffs have recurred since ChatGPT reached the mainstream, but a recent two-day rout wiped out hundreds of billions across stocks, bonds and loans. Software stocks led losses, with an iShares ETF tracking them falling almost $1 trillion over seven days. The selloff stemmed from concern that AI is close to supplanting many business models rather than from a speculative bubble. Anthropic's release of a legal-review tool amplified fears after its coding tools already reshaped software development. Even major AI beneficiaries showed strain: Alphabet signaled higher AI capital spending and Arm issued a disappointing revenue forecast.
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