Stories

Wed, 29 Jul 2026

Wed, 29 Jul 2026 Some tech shares are plunging - what does that mean for the AI revolution?

Sharp falls in the value of chip makers have stoked investor concerns that the euphoria around AI related companies is fading.
Sharp declines in chip maker stocks have sparked concerns that the artificial intelligence (AI) market bubble may be bursting. Despite AI's promise to revolutionize industries, investors are questioning whether the tech's euphoria is justified by its actual value. Leading tech investor Eileen Burbidge believes there is still a "healthy degree of scepticism" about AI's potential return on investment. However, she also thinks that the bubble hasn't yet burst, but rather "it's letting out air." Concerns have been fueled by recent breakthroughs in chip manufacturing and potential cost increases for big tech companies like Meta, Alphabet, Open AI, and Anthropic. These firms are expected to spend hundreds of billions on buying chips and building data centers that power the technology. Some companies, such as SpaceX and Tesla, have seen their shares plummet despite announcing significant increases in spending on AI. Meanwhile, Apple has risen 21% over the last month after largely sitting out the AI arms race. London's benchmark FTSE 100 index, often referred to as the "anti-tech index," briefly touched a record high due to its lack of exposure to tech-heavy companies like chip makers Nvidia and Google. Investors are now closely watching how these big tech companies plan to spend their money and when they expect to generate returns on those investments.