Remember when everyone was convinced AI was going to solve world hunger, cure cancer, and probably do your taxes while making you a perfect cup of coffee? Yeah, well, the stock market is having second thoughts about that whole thing.
The AI darlings that had investors throwing money around like confetti at a New Year’s party are now looking more like the morning after. Nvidia’s down 13% since November, Oracle has face-planted 43%, and CoreWeave is joining the double-digit decline club. It’s like watching the cool kids realize the party’s over and they still have to clean up.
Enter Gary Marcus, an AI scientist who’s basically been that friend saying “I told you so” while everyone else was buying the hype. Marcus thinks the ChatGPT-5 launch last August was the moment investors collectively went, “Wait, that’s it?” It was supposed to be the iPhone moment for AI, but instead it felt more like getting a slightly better flip phone.
Here’s the thing that’s actually pretty wild: investors are fleeing tech stocks for two completely opposite reasons. Some are bailing on companies like Nvidia because they’re worried about all these circular funding deals (basically companies investing in each other in a financial version of musical chairs). Others are dumping traditional software companies like Salesforce because they’re terrified AI will eat their lunch.
It’s like being afraid of both the monster under your bed AND the monster in your closet. Pick a lane, people.
Marcus points out something that should make everyone’s spidey senses tingle: all these companies are basically propping each other up with investments. Microsoft invests in OpenAI, OpenAI buys from Nvidia, Nvidia invests in AI startups – it’s like a financial Jenga tower, and everyone’s wondering who’s going to pull the wrong block.
The reality check started hitting when Sam Altman claimed OpenAI knew how to build AGI (that’s Artificial General Intelligence for those keeping score at home). Spoiler alert: if you have to explain what your revolutionary technology will do “someday,” maybe it’s not quite ready for prime time.
What we’re seeing now isn’t just a temporary dip – it’s investors realizing they might have been sold a really expensive bridge to nowhere. The software sector is getting hammered, with the tech ETF down another 3% just this week. Even Google’s parent company Alphabet took a hit after revealing they’re planning to spend even more money on AI infrastructure.
Look, AI isn’t going anywhere, and it’s definitely useful for some things. But maybe, just maybe, it doesn’t need to be worth more than the GDP of small countries. Sometimes the market needs a reality check, and this might be one of those times.
The question now is whether this is a healthy correction or the beginning of a bigger reckoning. Either way, it’s probably a good time to remember that when everyone’s convinced something is a sure thing, that’s usually when you should start asking questions.