Fed Chair Warsh Warns AI Funding May Dry Up on Missed Targets, Triggers 0.66% Nasdaq-100 Drop
Fed chair Kevin Warsh warned that funding for artificial intelligence firms would dry up if companies fail to meet investor expectations, noting that recent infrastructure spending has already created early signs of overcapacity in memory chips and related components. He cautioned that artificial intelligence investment is outrunning actual monetization and advised against assuming all projects will generate the returns currently priced into the market.
The comments prompted a sharp repricing in technology equities, driving the Nasdaq-100 index down 0.66%. Artificial intelligence and memory stocks bore the brunt of the decline, with $SNDK falling 12.5%, $SKHV dropping 10%, and $MU, $WDC and $INTC sliding 7%, 7.5% and 5%, respectively.
From the sources (25 posts)
@financialjuiceFed's Warsh: Productivity growth has been strong, predating gains from AI adoption.
@bitcoinnewsJUST IN: 🇺🇸 Fed Chairman Warsh told the House Financial Services Committee that the economy's benefits from AI are not yet fully known, but monitoring implications for employment and inflation. "That which we're now calling AI investment w
@financialjuiceFed's Chair Warsh: In the long term, AI means material productivity improvement, but it can be quite far out.
@firstsquawkWARSH SAYS AI WILL SIGNIFICANTLY BOOST PRODUCTIVITY OVER TIME.
@yahoofinanceFed Chairman Kevin Warsh said AI "is the most significant change in our economy in my adult lifetime," in a testimony before Congress on Tuesday. "It's a huge opportunity, but it also comes with risks and challenges," Warsh added. https://
@tftc21Fed Chair Warsh says AI investment is growing so fast it will soon "just be called investment," with high-tech spending up nearly 25% in Q1 driven by data center construction and AI demand.
@financialjuiceFed's Warsh: My best guess is AI will augment work, not replace.
@financialjuiceFed's Chair Warsh: AI may be disruptive for jobs in the near term, but it will create new jobs.
@yahoofinanceFed Chairman Kevin Warsh says "America will be richer," and more productive from this AI cycle if it repeats prior positive technology trends.
@tftc21Fed Chairman Kevin Warsh told Congress on Tuesday that AI is "the most significant change in our economy in my adult lifetime." "It's a huge opportunity, but it also comes with risks and challenges."
@firstsquawkWARSH: IN NEAR TERM, I THINK AI INVESTMENT IS GOOD FOR JOBS
@financialjuiceFed's Chair Warsh: In the near term, I think AI investment is good for jobs.
@financialjuiceFed's Chair Warsh: In the long term, I believe AI will help wages and employment.
@wallstengineFED WARSH: RECENT INFLATION DATA IS IMPERFECT GAUGE OF UNDERLYING INFLATION IN NEAR TERM AI INVESTMENT IS QUITE GOOD FOR JOBS IN LONG TERM BELIEVE AI WILL HELP WAGES, EMPLOYMENT IN BETWEEN AI WILL CAUSE DISRUPTION
@financialjuiceFed's Chair Warsh: I've been asking for access to a range of new AI models.
@financialjuiceFed's Chair Warsh: We see AI impact on demand more quickly than on supply.
@financialjuiceFed's Warsh: Whether AI is inflationary or not will be up to the Fed.
@firstsquawkWARSH: WHETHER AI IS INFLATIONARY OR NOT WILL BE UP TO FED
@financialjuiceFed's Chair Warsh: AI price surge is real, don't want to be dismissive.
@firstsquawkWARSH SAYS THE FED WILL DECIDE IF AI INCREASES INFLATION OR NOT.
@firstsquawkWARSH STATES AI WILL CREATE JOBS IN THE LONG RUN.
@bulltheoryioBREAKING: NASDAQ 100 is down -0.66% after Fed Chair Kevin Warsh raised doubts about AI spending. Memory and AI stocks are crashing the most on his statement: $SNDK down 12.5% $WDC down 7.5% $MU down 7% $SKHV down 10% $INTC down 5%. Wars
@financialjuiceFed's Warsh: If AI firms disappoint investors, capital would dry up.
@firstsquawkWARSH SAID THAT IF AI COMPANIES FAIL TO MEET INVESTOR EXPECTATIONS, FUNDING WILL RUN OUT.
@financialjuiceFed's Chair Warsh: If there were a disappointment on what AI could do, much of the AI-related capex investments still have alternative uses.