I think it's a correction, nothing to panic over for now.
If it keeps going then the bubble would have burst. But if I'd had to guess, one of the big players have to reveal that they crapped the bed for everything to burn down, probably OpenAI or Oracle
Microsoft was wise to make the decision to cool their ambitions with regards to AI, they should work on their strengths (Windows OS, MS office, etc.), enter the space vacated by competitors who pivoted to AI recklessly, then be in place to sweep up the right companies when they collapse during the bubble burst
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