Enormous capital has flowed into AI, producing nearly 500 AI unicorns valued at about $2.7 trillion. That concentration of value creates significant economic downside risk if outcomes disappoint. Recent trading showed investor unease, with the Nasdaq falling nearly three percent in five days and erasing weeks of gains. Nvidia and Microsoft experienced notable drops, and other major tech firms declined. The S&P 500 sank for four consecutive days, down roughly 1.5 percent, while Palantir slid about 9 percent after a record valuation. Combined market losses exceeded $1 trillion, prompting uncertainty over bubble versus profit-taking.
There are now almost 500 AI unicorns - companies valued at over $1 billion - worth a total of roughly $2.7 trillion, enough to do some serious damage to the economy if things don't go well. But for investors, that cash represents a dream: that AI will someday do more than generate video essays explaining that Nubian giants built the pyramids, and become a major financial driver.
Whether that will ultimately come to pass is anyone's guess. But for the first time since US president Donald Trump's bizarre tariff scramble back in April, Wall Street is clearly getting the jitters. Over the past five days, the Nasdaq - a tech-heavy stock exchange - tumbled by nearly three percent, a trajectory that wiped out weeks of big tech gains.
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