US Tech Stocks Hit By Concerns Over Future of AI Boom

US tech stocks sold off as warnings that the hype surrounding AI could be overdone hit some of the year's best-performing shares. From a report: Nvidia, the chips group that has surged to become the world's first $4tn company on the back of AI, fell 3.5 per cent on Tuesday, while software group Palantir dropped 9.4 per cent and chip designer Arm shed 5 per cent.

The tech-heavy Nasdaq Composite closed down 1.4 per cent, the biggest one-day drop for the index since August 1. The blue-chip S&P 500 fell 0.7 per cent. European and Asian markets largely followed Wall Street lower on Wednesday. Japan's Nikkei 225 index fell 1.5 per cent and South Korea's Kospi slipped 0.6 per cent. Futures price indicated moderate declines when Wall Street opens.

Traders pinned some of the declines in the US on a critical report on Monday authored by a branch of the Massachusetts Institute of Technology. Researchers said '95 per cent of organisations are getting zero return' from their investments in generative AI, the technology that has sent US stocks soaring to record highs in recent months.

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