The decline in AI-related stocks accelerated after the Democrats' victory in the midterm elections. The IPO prospects for OpenAI and Anthropic and the risks surrounding AI financing have heightened market caution.
The plunge in related stocks began in early October, shortly before the midterm elections, and the election result delivered the final blow. IPO developments involving 2 companies at the center of the AI sector heightened investor concerns and increased overall selling pressure.
Amid reports that OpenAI's annualized revenue was just under US$50 billion, alongside figures of US$70 billion, investors increased disappointment-driven selling over numbers that fell short of market expectations. Anthropic reported revenue of US$16.8 billion for the July-September quarter, up approximately 50% from the previous quarter, but a view became widespread that growth had slowed from the approximately 140% rates recorded in the January-March and April-June quarters.
Major companies making substantial investments in data centers are said to have their AI-related revenue concentrated in these 2 companies, undermining the assumption that expectations for AI-lab growth will support share prices. While companies continue to raise funds, credit risk has increased, and yields on CoreWeave bonds have surged to approximately 15%. The Democrats securing majorities in both houses of Congress has raised concerns about tighter AI regulation and higher taxes, potentially creating headwinds for the market as a whole.