Given that the New York Times is covering something I have been sensing for over 7 months+ about spending on AI I guess I have to welcome them to the class since they just woke up.

Technology stocks extended their losses on Thursday, dragged down by a sharp decline in semiconductor shares as investors grew concerned about how companies will finance their enormous artificial intelligence spending plans.
South Korea’s benchmark KOSPI tumbled more than 7 percent, its seventh straight daily decline. The market, which has shed about a fifth of its value over that period, has become a bellwether for the A.I. boom, thanks to its two dominant memory chip makers, Samsung Electronics and SK Hynix.

Given that everyone including their mothers are dropping a near bottomless amount into CAPEX spending and not checking their credit card statements on how much they have spent is going to come back to haunt AI makers and chip makers fairly soon. You can not drop billions into the trillions and expect it to magically pay itself off when LLM’s and AI are not a proven tech, They are a tech but how many stories do we hear about something with AI doing something it should not.

Semiconductor stocks took a beating in Asia. In South Korea, SK Hynix plunged 11 percent and Samsung dropped more than 9 percent. Taiwan’s TSMC slid 2 percent and Japan’s SoftBank, a major investor in A.I., dropped more than 8 percent.

Eventually the AI spending gravy train will stop and it will not be a soft landing, it will start with one middle of the road AI maker going broke because they did not make enough back to cover their CAPEX spending. LLM’s have been quietly begging governments for protections in the last 5 months very quietly. Whether it be stop us from becoming skynet or please back us because we are the future. The problem is most LLMs are google search just with a better suit on.

In Europe, chip makers and related companies suffered steep declines, with ASML, Infineon and STMicroelectronics all losing more than 5 percent in early trading.

Chipmakers are going to be the second to be hit, as more mid-tier LLMs start going down the carrion birds of tech will start eating up the middle companies and chip makers will see slightly lower orders.

As tech market jitters persist, TSMC, the main chip manufacturer for Nvidia’s A.I. chips, said it has no intentions of slowing down.
After announcing another quarter of blockbuster earnings, C.C. Wei, the company’s chief executive, said: “We are using multiple levers to do everything we can, whenever we can, as fast as we can to maximize the support to our customers. We have no intention to leave food on the table for others. We want to capture every piece of business possible.”

Nvidia is playing the most dangerous game of all, they are just saying we want no one else at the table and the fact is once the middle of the market falls out, while they will be making more money than the rest its what comes after when no one is buying Nvidia chips because of the feeding frenzy when the middle and bottom markets drop out. Also Nvidia is banking on the idea of being Jeremy Clarkson and screaming MOOOOOORE POWWWWWAHHH when some janky upstart could come about and say we can do the same AI with 1/4th the compute which would create a market black hole.

Attributions from:
The New York Times – Tech Stocks Plunge as Doubts Over A.I. Spending Intensify