AI Bubble Fears: In the world of rapidly changing technology, big ups and downs are being seen with the advent of AI. On one hand, companies laid off thousands of employees, while on the other hand, huge investments are being made in AI. It is clear from this that the ways of working are going to change in the coming times. But warnings continue to emerge about AI—it is being called a ‘bubble’ that could burst at any time. Many experts in the technology world have indicated that there is a possibility of a bubble in AI.

Why is AI being called a ‘bubble’?

Recently, Google CEO Sundar Pichai cautioned users about the use of AI. He said that do not trust AI blindly. Besides, he also advised the companies investing in AI to be cautious, calling it a bubble which if bursts, no one will get a chance to escape.

OpenAI founder Sam Altman and Microsoft founder Bill Gates have also given similar warnings. AI is being compared to the dot-com bubble of 2000—when there was a lot of excitement about the rise of the Internet, investments were growing rapidly, but suddenly the bubble burst and investors suffered huge losses. Today the same over-enthusiasm is visible about AI, that is why the discussion about the bubble is intense.

Is there any merit in the claim of AI bubble?

Due to AI, there has been a sharp rise in the shares of tech companies in the stock market. Market experts fear that if this bubble bursts, it could have a direct and deep impact on the global stock markets. A big question is that it has been three years since AI came into prominence, so why this debate now? Actually, this discussion has increased after the latest reports of many companies.

The big seven companies listed on the US stock market—Apple, Microsoft, Google, Meta, Tesla, etc.—alone hold about 34% of the total market cap. More than half of the stocks that rose the most last year belonged to these companies. Therefore, the decline in these companies will have a direct impact on the entire stock market.

Learning and using AI is important, but investing solely on AI models or AI-powered predictions can be risky. If this AI bubble actually bursts, the possibility of huge losses cannot be ruled out.

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Us stock market falls: US President Donald Trump on Monday announced to put 25 percent new tarf under the trade deal over his business partner countries South Korea and Japan. These new rates will be applicable from August 1. Along with this, Trump has also expressed the possibility of a mini trade deal with India soon. He warned Japan and South Korea that if any country imposes counter -tariffs, then the US will be imposed tariff in proportion to the same rate.

US market declines

Here, the US market has seen a decline between Trump’s announcement of this new tariff and fears of trade war. Dow Jones went down 1.2 percent i.e. 525 points, while Nasdaq composite fell down one percent. Whereas, S&P 500 has also fallen 0.9 percent.

Stocks of Honda Motor and Toyota Motor have also fallen by 4 percent, while Google’s parent company Alphabet Inc. and Apple’s stocks also affected it and it is 1 percent. The stocks of NVIDIA and AMD have also seen a decline.

10 percent additional tariff on BRICS group

President Donald Trump also threatened to put 10 percent of additional tariffs over the countries of the BRICS group supporting anti -American policies. The threat by Trump was given at a time when the US tariff was criticized without being named Trump during a conference in Brazil.

Significantly, the group of BRICS countries includes Brazil, Russia, China, India and South Africa. Apart from this, when the expansion was done, Indonesia, Egypt, Iran, Ethiopia and UAE were also included in it. Also, Belarus, Vietnam and Cuba are also included.

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Israel Iran Tensions: Wall Street was shaken on Friday after the attack on Iran by Israel. A strong attacks were carried out by Israel by targeting Tehran’s important establishments to prevent Iran from making nuclear weapons. In response to this, Iran was also reversed, after which where the voice of Israeli siren was heard, there was echo of explosions in Jerusalem.

Due to the attacks and counters between Israel and Iran on each other, on the one hand, there has been a fear in the minds of global investors, on the other hand, there has been a lot of tension in the Middle East.

Increased tension in the middle east

It is believed that if there are attacks on each other in this way, then the supply of crude oil can be interrupted from the Middle East. This is the reason that as soon as Israel attacked Iran, after that the price of crude oil climbed 7 percent.

Due to the increase in fuel prices, there is a decline in stocks of airlines companies. United Airlines has come to 4.4 percent, American Airlines 4.9 percent and Deelt Airlines 3.8 percent. However, the defense stocks including RTX Corporation have been seen to be fast since the Israeli attack.

Energy stocks boom

Energy sector is visible in enthusiasm due to Israeli attack on Iran. Diamondback energy has shown a jump of 3.7 percent and Exone of about 2 percent. While the S&P 500 index slipped 1.13 percent on Friday. Nasdaq was also 1.30 percent and Dow Jones Industrial Average was down 1.79 percent.

The market experts believe that if all this continues in this way, then the situation can be serious. Ilyas Hadad, a senior market analyst of Brown Barsha Heriman, says that if this situation continues, we can get caught in a completely military struggle.

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A day earlier on Thursday, after the brightness in the Asian market on Thursday, a period of decline continued on Friday. At the peak between the US and China, the trade tension is directly affecting the wall street. Nikkei of Japanese 5.46% Fila i.e. it fell by 225 points. Earlier, the tariff on the tariff placed on many countries by Trump was brightened in the Asian market. Nikkei saw a rise of 9% on Thursday.

Retail shares fell by 3.87%. Tokyo Electron’s stock fell down 5 percent and Advantest Stock also fell 7.5 percent. After a decline in all 22 industry sub -index of the Tokyo Stock Exchange, Japanese Prime Minister Shigeru Ishiba formed a task force to carry out business talks with the US.

Minister of Economic Affairs Ryosei Akazawa will lead this task force and the media there says that it is expected that he will visit Washington next week.

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