
19 days · 13 summary articles
Global risk aversion deepened on Saturday as surging demand for AI chips sent tech costs soaring, pushing markets into a sharp sell-off and forcing investors to reassess the sustainability of the artificial intelligence boom. Core US inflation met forecasts, tempering expectations of Federal Reserve rate hikes from two to one by year-end, yet the mood on trading floors remained cautious as chipmakers’ valuations stayed elevated and OpenAI’s delayed IPO removed a key pillar of optimism .
Futures on Wall Street fell sharply after the chip sector resumed its slide, with Micron Technology’s shares tumbling 5% in the previous session as investors digested the delayed listing of OpenAI, once seen as a bellwether for the AI investment cycle . Asian markets echoed the caution, with sharp sell-offs across the region as traders questioned whether the AI-driven rally had run ahead of fundamentals .
The surge in chip demand is already rippling through consumer markets, with electronics prices in Estonia rising as memory chip costs climb and Amazon raising prices for its core AI cloud services in response to the same pressures . In South Korea, the bonanza for chipmakers has translated into outsized employee bonuses that economists warn could stoke inflation, underscoring how AI’s economic footprint is expanding beyond equity valuations into wages and prices .
While the US government has granted Anthropic permission to resume operations of its most powerful AI model, Mythos 5, the move reinforces Washington’s tightening control over strategic AI access rather than easing market jitters . Meanwhile, the European Central Bank’s latest research shows AI is already reshaping employment patterns across the continent, though wage growth has yet to reflect the shift .
With chip valuations stretched and the Fed’s path uncertain, the AI rally faces its sternest test yet. The delayed OpenAI listing removes a key catalyst, while rising costs threaten to crimp end-user demand just as supply constraints bite. The question now is whether the sector can justify its lofty expectations—or whether the bubble is finally losing air.
Follow us for live European news
2 further sources not geolocated