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Wow. Wednesday was not a fun day, particularly if you’re a Verizon customer (guilty!), thanks to a widespread cellular phone outage that hit many of its subscribers for much of the day. It also wasn’t fun for tech investors as stocks sold off across the board. What wasn’t uniform, though, was the severity of the selling. Microsoft, Amazon and Meta Platforms each dropped about 2.4%, while Alphabet, nowadays everyone’s favorite tech company, only lost 0.04% of its value. Apple was also relatively better off, dropping just 0.4%. Nvidia fell 1.4%.
Does Wednesday’s selling say anything about what the rest of the year holds? Perhaps. Bloomberg reported that investors are shifting out of tech into other industries. Indeed, so far this year, the big tech names are mostly down by single-digit percentages, aside from Alphabet, which is up 7%, and last year’s poorest big tech performer, Amazon, which has gained 2.5%. It makes sense that investors are getting even pickier. For all its promise, the AI revolution that has lifted big tech stocks for the past three years remains enormously risky, with the outcome uncertain.
But not everything lives or dies on AI (yet). Among the worst hit on Wednesday were travel-related stocks such as Airbnb, which fell 5.2%, dragged down by worries about the impact of the Trump administration’s latest squeeze on visas, which is sure to hurt travel to the U.S. The visa news overshadowed Airbnb’s hiring of a former Meta AI leader as chief technology officer (catch TITV’s interview with Airbnb CEO Brian Chesky here). The few winners on Wall Street on Wednesday included crypto stocks such as Coinbase and Strategy, while Intel—which has gone from zero to hero in the past six months—gained 3%.
Intel is up 32% so far this year and is now trading close to $49. The once iconic chipmaker was stuck around $20 for much of last year, until President Donald Trump met with CEO Lip-Bu Tan in August and dropped his earlier call for the CEO’s departure, instead embracing Tan’s plan for reviving the company. The government then bought 10% of Intel, while Nvidia and SoftBank also piled in. All are looking smart now. Whether Intel’s chip business can be revived, though, is a whole other matter. For now, investors have fallen in love with Intel, once again.
Cerebras’ Happy Day
How about that! Just days after we reported that AI chipmaking startup Cerebras Systems was in talks to raise money and was hoping to go public this year, OpenAI announced Wednesday it will buy 750 megawatts of Cerebras’ chips, to be incorporated in its servers through 2028.
Cerebras investors surely welcomed the endorsement from OpenAI, despite all the uncertainty about OpenAI’s ability to pay for all the chips and data center capacity it has already committed to. What’s the bet that Cerebras files paperwork for an IPO in the next few days?
In Other News
• Google announced on Wednesday that its Gemini chatbot can now access information from users’ other Google apps, if users opt in. The new feature, dubbed Personal Intelligence, leans into Google’s biggest advantage over rivals like OpenAI: the wide range of data Google has from other areas of users’ lives, which could make for a more effective AI personal assistant.
• Chinese AI developer Zhipu on Wednesday released a new open-source AI image model trained entirely with chips from Huawei Technologies. The move is the latest example of how China is ramping up its effort to reduce its dependence on American AI chips and become more self-sufficient in critical areas of technology.
• In a research paper published this week, DeepSeek’s founder and researchers proposed a new technique that makes AI models more efficient by allowing them to retrieve simple factual information without relying on a compute-intensive process.
• The Ohio Carpenters’ Pension Plan sued Oracle, alleging the tech company didn’t properly disclose it would need to raise additional debt to satisfy its roughly $300 billion cloud computing contract with OpenAI when it sold $18 billion in bonds last year.
Today on The Information’s TITV
Check out our latest episode of TITV in which we sit down with Brian Chesky to talk about the state of Airbnb’s business.
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