Shares of major technology companies have fallen over fears about the valuations of firms linked to the artificial intelligence (AI) industry.<\/p>\n
Investors have grown increasing wary about what they are calling an “AI bubble” this year that has seen tech stock valuations hit record highs. <\/p>\n
Major indexes in Asia were the hardest hit on Wednesday, following a sell-off in the US. Japan’s exchange fell more than 3% dragged lower by tech investment giant, SoftBank, which plunged more than 10%.<\/p>\n
AI valuation concerns took hold in the US as well after it was revealed the trader who inspired The Big Short has bet $1.1bn on a fall in prices for AI-related stocks Nvidia and Palantir.<\/p>\n
“It seems fatigue over AI and the current earnings run has investors questioning the sustainability of the AI hype. That’s dragged down AI companies overnight in markets,” said financial analyst Farhan Badami.<\/p>\n
Markets worldwide have climbed in over the year as investors placed their chips in companies linked to AI, including Nvidia, Intel and AMD.<\/p>\n
Many jumps in tech shares have been linked to major investments in firms. For instance, Amazon shares hit an all-time high on Monday after the announcement of a $38bn (\u00a328bn) deal with OpenAI<\/a>.<\/p>\n But the shares of many tech firms fell on Wednesday. Amazon’s stock dipped by 1.84% and notably, Nvidia – recently the first company to ever be valued at $5tn<\/a> – dropped by close to 4%.<\/p>\n SoftBank, one of Japan’s largest firms, suffered one of steepest drop in shares. The fall weighed especially hard on Japan’s Nikkei index.<\/p>\n