Tech Stocks Take a Tumble: AI Boom Faces Reality Check

Tech stocks in the US took a hit recently, with Oracle leading the drop. The company's shares fell sharply after its main financial backer, Blue Owl Capital, backed out of a major data center project in Michigan. This news sparked worries among investors about the huge amounts of money AI companies are spending and the debt they're taking on to fund these projects. The tech-focused Nasdaq Composite index also saw a decline, with other big names like Nvidia, Alphabet, and Broadcom experiencing drops. This follows a recent sell-off triggered by disappointing earnings from Oracle and Broadcom. The broader market, represented by the S&P 500 index, also felt the impact but remains close to its record high.Experts suggest that investors are taking profits from their AI-related investments, signaling a shift in sentiment. The pullout by Blue Owl Capital is seen as a sign of caution, indicating that not everyone is as optimistic about the AI boom as some investors might be. The situation raises questions about the sustainability of the current AI spending spree. With companies borrowing heavily to build infrastructure, the market is watching closely to see if these investments will pay off or lead to more financial strain.