The Economy Is Lurching Downward as Fear of AI Spreads

"Nvidia's shares tanked by over five percent following the announcement, as Bloomberg reports, in its biggest one-day drop since mid-April. It was a baffling reaction to a financial slam dunk, highlighting ongoing fears that the massive amount of money the AI industry is pouring into the construction of gigantic data centers across the country may not be sustainable."

"Tech leaders continue to warn that a return may still be many years out, if one ever materializes, while burning through billions of dollars each quarter. By Friday, the situation didn't look much brighter. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite lurched down as fears about the impact of AI on the economy continued to grow."

"Block announced on Thursday that it was laying off nearly half of its workforce, citing AI advances. The move was seemingly seen as a manifestation of fears that AI automation could soon send employment numbers off a cliff, which could have grave economic consequences in the long run."

Nvidia, the world's most valuable company, reported a 73 percent increase in fourth-quarter revenue, yet its stock fell over 5 percent following the announcement. This counterintuitive reaction reflects broader market concerns about the sustainability of massive AI industry spending on data centers. Tech leaders warn that returns may take years or never materialize while companies burn billions quarterly. Market indices declined significantly in February, with the S&P 500 and Nasdaq Composite tracking toward their worst month since March 2025. Block's announcement of layoffs attributed to AI advances intensified fears about automation's employment impact. Nvidia shares continued declining Friday, signaling skepticism about the AI industry's long-term viability and growth sustainability.

Read at Futurism