Tech Stocks Plunge After MIT Reveals 95% of Firms Haven’t Been Able to Profit From Generative AI

The AI hype train just went off the rails. An MIT study found that 95% of companies are seeing zero returns from their generative AI bets — sending shockwaves through a market that has staked trillions on the technology. Even OpenAI’s Sam Altman admitted shareholders are “overexcited” about AI prospects, warning that “some investors are likely to lose a lot of money” as irrational exuberance grips the market.

• The revelation hammered AI darlings across the board yesterday, sending PalantirPLTR
  , NvidiaNVDA
  , and OracleORCL
  down as much as 6%, 3%, and 2% intraday.
• Meta’s sharesMETA
  also pulled back 2% on Wednesday, with reports of their AI division downsizing amid ChatGPT 5’s underwhelming launch.

Reality bites: The spending spigot that’s been fueling this AI boom could shut off faster than investors expect. Barings Trevor Slaven noted, “Whenever you see these huge capex booms, there’s so much demand for it, there’s so much money to be made, almost inevitably, you overbuild.” With Meta, MicrosoftMSFT

, AlphabetGOOGL

, and AmazonAMZN

expected to pour $400B into AI next year, any slowdown could create a domino effect — especially since these tech companies are also each other’s biggest customers.