Wall Street’s multi-year confidence in artificial intelligence is undergoing a major stress test, as investors increasingly view OpenAI—and the broader generative AI sector—not as a guaranteed engine of exponential growth but as a potential source of systemic risk for the technology industry. A dramatic selloff in tech stocks on Thursday highlighted the market’s growing frustration with the “spend now, profit later” strategy that has powered the AI boom for the past three years. Microsoft led this downturn, with its shares plunging 12 percent by midday, wiping out more than $440 billion in market value in one of its worst collapses since the pandemic era. The Nasdaq index was also down nearly 2 percent during the session. Skepticism Grows as Microsoft’s OpenAI Commitments Fuel Market Turbulence The shift in sentiment appears largely driven by concerns over soaring capital expenditures. Microsoft disclosed that its capex jumped 66 percent to $37.5 billion in the latest quarter, even as growth in its Azure cloud unit softened. More alarming for analysts was the revelation that roughly 45 percent of Microsoft’s $625 billion in remaining performance obligations is directly tied to OpenAI. The scale of this exposure raised fresh questions about whether OpenAI can generate sufficient… Read MoreBusiness Archives – Trak.in – Indian Business of Tech, Mobile & Startups
