Why AI fear is sweeping markets
Why AI fear is sweeping markets
Bezos’ wealth drops by $21 Billion as Amazon sinks on AI fears
Who will control the future of AI? by Sam Altman, CEO of OpenAI
Why AI fear is sweeping markets
In a striking turnaround, stock markets that were riding high just two weeks ago have entered a steep decline. The NASDAQ 100 index, heavily influenced by major technology companies, has dropped over 10% since reaching its peak in mid-July, marking a significant shift from the previous bull run that saw record highs.
This downturn can be attributed to three key factors that have unsettled investors. First, there is a growing recognition that the excitement surrounding artificial intelligence (AI) and the chipmaking sector that supports it may have been overly optimistic. The recent earnings reports from five tech giants—Alphabet, Amazon, Apple, Meta, and Microsoft—have left shareholders disappointed.
The implications for chipmakers are particularly concerning. If AI investments begin to retract, the previously anticipated insatiable demand for their products may not materialize. Recent developments have compounded these fears. On July 17, former President Donald Trump’s comments suggesting that Taiwan should finance its own defense against China sent semiconductor stocks tumbling. Given that Taiwan is home to TSMC, the leading manufacturer of advanced chips, concerns about a potential Chinese invasion have intensified. Additionally, the Biden administration is considering new restrictions on the export of chipmaking equipment to China, further complicating the landscape for chip manufacturers. With demand faltering and geopolitical tensions rising, it is no surprise that chip stocks are experiencing significant declines.
As technology companies falter, the broader U.S. economy is also feeling the impact. The market's previous mantra of "bad news is good news"—where signs of slowing growth or a weaker labor market were seen as beneficial for asset prices due to the potential for lower inflation and quicker interest rate cuts by the Federal Reserve—has shifted. Following the release of the jobs report on August 2, the sentiment has changed: bad news is now perceived as bad news….
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Bezos’ wealth drops by $21 Billion as Amazon sinks on AI fears
Jeff Bezos saw his wealth plummet by more than $21 billion following Amazon.com Inc.'s announcement that it would continue to invest heavily in AI, prioritizing long-term growth over short-term profits. On Friday, shares of the online retail giant fell as much as 13%, bringing Bezos' net worth down to $185.3 billion. This one-day loss is the second largest in his financial history, surpassed only by the $36 billion drop he experienced on April 4, 2019, due to his divorce settlement.
Amazon's CEO, Andy Jassy, has been implementing a cost-cutting strategy aimed at reallocating resources toward AI investments. However, this approach has raised concerns among investors about the potential impact of increased capital expenditures on the company's profitability. Many are expressing apprehension that the enthusiasm surrounding AI-driven growth may be overstated, and that the market could be overly reliant on a few major players.
At 60 years old, Bezos remains the world's second-richest individual, but he has been actively selling off Amazon shares this year. In February alone, he sold approximately $8.5 billion worth of stock over just nine trading days. Additionally, during a recent day when Amazon reached a new record high, he revealed plans to sell….
Originally by Diana Li of Bloomberg
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Who will control the future of AI?
That is the urgent question of our time. The rapid progress being made on artificial intelligence means that we face a strategic choice about what kind of world we are going to live in: Will it be one in which the United States and allied nations advance a global AI that spreads the technology’s benefits and opens access to it, or an authoritarian one, in which nations or movements that don’t share our values use AI to cement and expand their power?
There is no third option — and it’s time to decide which path to take. The United States currently has a lead in AI development, but continued leadership is far from guaranteed. Authoritarian governments the world over are willing to spend enormous amounts of money to catch up and ultimately overtake us….
….The first chapter of AI is already written. Systems such as ChatGPT, Copilot and others are functioning as limited assistants — for instance, by writing up patient visits so nurses and doctors can spend more time with the sick, or serving as more advanced assistants in certain domains, such as code generation for software engineering. More advances will soon follow and will usher in a decisive period in the story of human society….
Originally By Sam Altman co-founder and CEO of OpenAI in WaPo Opinion