The slide appears to reflect concerns that tech companies have built more AI computing capacity than they really need, says Mohit Kumar, chief European economist at Jefferies.
Those fears were rekindled by a Bloomberg News report yesterday that Meta Platforms is planning a cloud business to sell excess computing power to outside customers-though the idea shouldn't come as a complete surprise: CEO Mark Zuckerberg confirmed weeks ago that building a cloud business was on the table:
"Almost every week there are different companies that come to us from outside asking us ..if we have compute that they could buy," he said at the company's annual general meeting. "We haven't done that yet because we think that we have a use for the compute. But obviously if we get to a point where we feel that we have overbuilt, then that is an option."
Memory-chip stocks were liable to altitude sickness. Even after today's slide, South Korea's SK Hynix has still more than tripled this year after a boom fueled by demand for its chips.
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