The global AI sell-off or the meltdown in artificial intelligence stocks has led to Jensen Huang, Co-Founder and CEO of US-based chip major Nvidia's loss
of around 15 billion dollars. This significant loss has pushed him down to the 13th place on the Bloomberg Billionaires Index from 9th place earlier. Experts believe the decline highlights the growing investor concerns over AI valuations and questions on how sustainable is the growth momentum of the sector. Huang's net worth fell by 15.1 billion dollars to 150.9 billion dollars, pushing him down four places to 13th on the Bloomberg Billionaires Index from ninth. He was among the biggest wealth losers of the day, alongside SpaceX founder Elon Musk and Oracle co-founder Larry Ellison. Market experts believe the sharp sell-off in AI-linked stocks is a sign that investors are becoming more cautious about the sector's valuations, capital expenditure, long-term returns and growth potential. In fact demand they believe while demand for AI infrastructure remains strong, concerns on the massive investments are only growing and whether these massive investments in data centres and computing capacity will generate adequate returns are also mounting. Adam Sarhan, CEO of 50 Park Investments, told Reuters that several AI-linked stocks were already in bear market territory, adding that investors were beginning to question whether customers would continue paying for AI products and services. He also pointed to concerns over the return on investment from rising AI spending. He said, "AI stocks are already in a private bear market that virtually nobody is talking about. If you look at the semiconductor index, it's down about 31% from its 52-week high. The point is that many AI-related stocks are already deep into bear market territory, and very few people are discussing it." Meanwhile, market participants cited crowded investment positions, leverage and forced selling as factors amplifying the latest correction. Analysts also flagged uncertainty over potential restrictions on data centre construction following Democratic victories in the US midterm elections. However, the sell-off does not necessarily signal the end of the AI growth story.
