Markets seized up this week when investors suddenly noticed that companies spending billions on AI infrastructure might, theoretically, need to actually make money from it someday. The horror. The scandal. The complete surprise that this was a possibility.
Major tech stocks tumbled on concerns over unsustainable AI spending—which is hilarious, because these are the same people who cheerfully bought crypto at $69,000, downloaded an app that promised to make them rich in their sleep, and convinced themselves that a company with negative earnings was a “growth story.” But now they are worried about sustainability. Now they want to see a business model.
The panic is particularly rich because it reveals the actual mechanism at work: investors did not suddenly become financially literate. They got scared. Fear of missing out got them in; fear of losing got them out. The AI spending was always there. The technology was always the same. What changed is the price went down, which made people remember that prices can go down, which made them very upset about decisions they made when prices were going up.
Here is what actually matters: if you own these stocks in a diversified portfolio and you are not retiring tomorrow, this is noise. If you bought them because your cousin said AI was the future and you needed to get in right now, then congratulations—you just learned that timing the market is hard and that panic selling locks in losses. The companies spending on AI are still spending on AI. They still think it will work. Whether they are right or wrong will take years to know.
The real absurdity is not the spending. It is that we all act shocked when markets correct, as if stocks are supposed to only go up, and then blame the companies instead of our own inability to sit still.