The Week the Cracks in the AI Trade Grew Deeper

Intel suffers worst-ever daily decline as investors’ anxieties hit new highs

Slowing growth. Dwindling cash piles. Cannibalized business lines. Pressure points are multiplying across the artificial-intelligence boom that has propelled markets and the economy.

The cracks in the AI trade widened through the week, culminating in a sharp tech selloff Friday that sent the Nasdaq composite to its worst day since June and its worst month in more than a year.

The vulnerabilities in Wall Street’s favorite trade have been building for months, periodically appearing around smaller companies drowning in debt. Each time, the largest firms behind America’s AI build-out have reassured Wall Street by printing profits, suggesting the show will go on even in a world of higher interest rates.

This week was different. After tech stocks had treaded water for weeks, AI giant Anthropic momentarily rejuvenated investors with a filing that showed soaring revenue ahead of its planned initial public offering. But then publicly traded tech firms reported earnings—and markets got a reality check.

First came a dissatisfying quarterly report from Alphabet, which showed that growth in Google’s search-advertising business slowed—in part because of the impact of “AI mode” queries. Traders punished the stock with a 13% decline Thursday that marked its worst day on record, hammering major Alphabet shareholders such as Berkshire Hathaway.

Then the bad tech vibes got worse. Late Thursday, Amazon reported plunging free cash flow and revenue that missed analyst estimates. American chip-making giant Intel forecast a prolonged slowdown in personal-computer sales, pressured by memory-chip prices sent skyrocketing by the AI boom.

Intel shares on Friday crashed 29%, the worst session on record for...

So who’s manipulating the market to influence the timing of this drop?

Doesn’t matter. AI will cut us no matter where it goes.

Creating the AI surveillance state will be expensive and some will gain massively by it while most will lose both money and freedom. But that’s a temporary concern as we give it control of our lives, viewing it as some kind of all knowing benevolent god, as we idol our time away on AI porn and entertainment. Eventually we, the Eloi, will not even know what is real and will be too stupid to care. That’s when we’ll own nothing and be happy about.

“Alphabet, which showed that growth in Google’s search-advertising business slowed—in part because of the impact of “AI mode” queries.”

i’ve been predicting this very thing here for months.

and it’s only going to get worse ...

the problem for the search/ad biz is that it has become a total waste of time to search the old fashioned way when one can just ask specific questions of google AI all day long and quickly get exact answers ... thus one never sees any ads at all because one is no longer looking at Internet content, just asking google AI questions and letting it do all the heavy lifting behind the scene, a scene in which ads make zero impression on google AI or those who ask it questions ...

the other negative side of this coin is that if no one is searching the old fashioned way, they are also no longer exposed to crowd-sourcing types of websites, and thus no longer feel the urge to contribute their knowledge, experience and expertise ... the result is going to be that no new crowd-sourced information will enter the Internet, and the old crowd-sourced information will soon go stale, thus quickly diminishing the value of the entire Internet as a whole ....

basically, google AI is eating its own lunch in multiple ways ...

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