1/7: The prevailing narrative suggests that the AI hype in markets may be fading. The ten largest US companies, largely tech-focused, represent about 40% of the S&P 500 and contribute significantly to its revenue growth. 📈 The index is up 9.5% so far in 2025.
2/7: In contrast, smaller stocks, represented by the Russell 2000 index, have seen more modest gains of 4.2%. The evident reliance on Big Tech for investor sentiment raises questions about the sustainability of this trend. 🤔
3/7: However, recent indicators hint at waning excitement surrounding tech and AI. Sales pitches from leading tech figures have started to feel less convincing, particularly as the latest AI models, like OpenAI's GPT-5, fail to impress. ⬇️
4/7: OpenAI's Sam Altman voiced concerns recently, suggesting that the ongoing hype might resemble a bubble. "Are investors overexcited? My opinion is yes," he stated, acknowledging the potential for significant investor losses. 💔
5/7: This honesty is uncommon among senior executives, yet Altman maintains faith in AI's vast potential. Nevertheless, even he hints at the possibility of overhyped expectations, revealing a more cautious outlook on the industry's future. 🌐
An MIT report has raised flags about AI investments, revealing that 95% of organizations see "zero return." Only 5% of AI pilots yield significant financial impact, calling into question the belief in easy profits from AI technology. 📊
Angry Economist