By Karim Hammam
A $2.5 trillion sell-off in major U.S. technology stocks has left investors questioning the durability of the artificial intelligence boom, with ripple effects across global markets.
Techmageddon
The sell-off, which marked the worst one-day loss for the S&P 500 since April 2025, has pushed benchmark indexes in Seoul, Tokyo, and Taipei into bear market territory. While Nasdaq futures showed a slight recovery on Friday, hedge funds are unwinding risky bets on AI companies.
Anthropic IPO in Doubt
Uncertainty surrounds the highly anticipated initial public offering of Anthropic, an AI startup valued at up to $1.5 trillion. Major investors are reportedly doubting the company can achieve that valuation, and prediction markets have sharply lowered the odds of a listing before December 1. A delay or scaled-back offering could disrupt the sector's circular financing arrangements.
Regulatory Headwinds
Beyond Washington's political shift, AI companies face growing obstacles at the state level, where a new wave of Democratic governors and legislatures are poised to tighten data center permitting. This regulatory bottleneck threatens the massive infrastructure spending required to sustain AI development.
OpenAI Outlook Challenged
The outlook for OpenAI, Anthropic's chief rival and another IPO candidate, also appears more difficult amid the market turbulence.
Market Indicators
The yield on the 10-year Treasury stood at 4.87 percent as government bonds rallied worldwide, signaling a flight to safer assets. Concerns about a bubble have persisted for over a year, but investors had previously brushed off warnings about memory chip shortages, energy bottlenecks, and high financing costs.
