Wall Street stumbled again on Friday as a global selloff in technology shares gathered pace, driven by deepening anxiety over the soaring cost of building artificial-intelligence infrastructure and a report that OpenAI may delay its long-awaited stock-market debut. The retreat extended a punishing stretch for the sector that has erased much of the spring's gains.
The Nasdaq Composite closed Thursday at 25,358.60, down 0.46 percent on the day and more than 6 percent below the record near 27,094 it set on June 2. The broad S&P 500 finished essentially flat at 7,357.49, shedding just 0.01 percent, while the Dow Jones Industrial Average — less exposed to technology — edged up 71.72 points, or 0.14 percent, to 51,920.62, a split that captured how concentrated the damage has been in AI-linked names.
At the heart of the unease is a growing question about the economics of the AI boom. Investors have begun to focus on the mounting capital costs of the data centers that power large AI models — the land, chips, power and cooling that run into the tens of billions of dollars for the largest projects — and whether the revenue those systems generate can justify the spending and the lofty valuations attached to it.
A report in The New York Times that OpenAI is leaning toward holding off its initial public offering until 2027 crystallized the doubt. The company, which has confidentially filed to go public and is targeting a valuation of up to $1 trillion, was said by bankers to be wary that recent volatility in tech stocks could sap demand for such a large offering. The signal that even the sector's marquee name is hesitating to test public markets unsettled investors already on edge.
That hesitation comes on the heels of SpaceX's turbulent debut. The rocket and satellite company's record IPO has been followed by sharp swings in its shares, a cautionary example for other richly valued private companies weighing whether now is the moment to list. The two stories have fed a single narrative: that the appetite for paying premium prices for AI-era growth is being tested.
The pressure has been most violent in Asia. Earlier in the week, trading in South Korea was temporarily halted after the benchmark Kospi index plunged 8 percent, triggering a circuit breaker designed to curb panic selling. Memory-chip giants Samsung Electronics and SK Hynix — central suppliers to the AI buildout — fell more than 8 and 9 percent respectively, dragged down by the same worries about whether AI infrastructure spending can be sustained.
The selloff marks a notable shift in tone. The same names that powered the market to records on optimism about AI demand are now leading it lower on fears about AI costs, a reminder of how thoroughly a few large technology and semiconductor companies have come to dominate the direction of the broad indexes. When sentiment toward them turns, the major benchmarks turn with it.
For investors, the coming weeks will test whether this is a healthy pause that resets stretched valuations or the start of a deeper repricing of the AI trade. Much will hinge on the next round of corporate guidance on data-center spending and on whether companies like OpenAI ultimately decide the public markets are ready for them — or wait, as the latest report suggests, for a calmer day.