Meta's aggressive AI investment of around $70 billion has caused its stock to drop over 11%, as investors worry about the lack of clear returns on the company's massive expenditures amid a broader industry trend of escalating AI investments by major tech firms like Microsoft and Alphabet.
A recent study suggests that investors are becoming more pessimistic about AI's impact on future economic growth, leading to declining long-term interest rates after AI model releases in 2023-2024. This challenges the narrative of AI-driven optimism and indicates that companies like Apple may be justified in delaying AI adoption, as the technology's transformative potential appears less certain than previously thought. The findings also highlight potential increases in economic inequality driven by AI's impact on individual companies rather than the overall economy.
Despite a 23% rally in Chinese stocks and low implied volatility, derivatives markets show investor skepticism about the sustainability of the rally, with expensive options and cautious positioning reflecting concerns over economic weakness and geopolitical risks.