US stocks suffered their steepest losses in months on Thursday as investors reassessed the outlook for artificial-intelligence investment after Democrats’ strong midterm results. The Nasdaq fell 5.5%, its worst daily performance in 19 months, and ended more than 10% below its recent peak - a level known as correction territory - with about $2tn erased from its value. Chip and storage companies bore the brunt: SanDisk plunged as much as 22%, Western Digital fell 17%, and Nvidia dropped 9.2%. The Dow lost 3.4%, the S&P 500 fell 4.3%, and the VIX volatility index surged 61%. The downturn spread abroad, with Japan’s Nikkei down 6% and South Korea’s Kospi more than 8% lower in early Friday trading.
Investors fear that Democratic governors and lawmakers will face pressure to curb datacentre expansion, following their party’s wins in gubernatorial races and local votes rejecting datacentres. That prospect threatens the scale and pace of infrastructure spending underpinning the AI boom, even as the technology’s longer-term potential remains widely accepted. The selloff reversed a rally the previous day, when investors had welcomed the possibility that election results could constrain the White House. Market observers described the move as a sharp unwinding of enthusiasm and momentum, while warning that AI-linked stocks may be priced for growth that is not guaranteed. The central concern is shifting from AI’s promise to whether its enormous costs and valuations can be justified.
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Richard Sutton argues that brute-force computation alone cannot produce intelligence and that AI needs clever new methods. He says the science of AI is far from finished. (twitter.com)
Anthropic is accused of charging Russian Claude users before identity checks, then cutting off access after verification and retaining biometric data. Critics say account bans can affect linked GitHub projects and Russian citizens living abroad, and accuse the company of failing to answer public questions. (twitter.com)
LLM coding agents boost workplace productivity but can prevent developers from learning through hands-on problem-solving and weaken their technical skills. Developers should preserve their expertise by building projects manually, studying fundamentals, and practicing without AI tools in their own time. (ducktape.blot.im)
A fabricated Newtype interview led The Diplomat to retract its article about a Korean startup’s AI war test in Ukraine. The retraction followed a diplomatic dispute. (thediplomat.com)
Microsoft Research’s AI Frontiers group brought together about 50 researchers to develop agent systems and foundational AI advances. After the team joined Microsoft AI in September, its research-first approach clashed with leadership’s emphasis on scaling. (hunch.net)
Microsoft researcher John Langford has left the company. Microsoft’s AI Frontiers group has been declared finished. (businessexaminer.ca)
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