FTSE slides as AI bubble fears spark fresh panic selling
Shares are tumbling at a pace that would make a Perth wicket collapse look tame, as renewed fears of an AI bubble rip through London markets.
The FTSE 100 plunged 104 points – just over 1% – to 9,423 at the opening bell, marking its lowest level in a month after Wall Street’s sharp losses overnight reignited risk aversion.
Defence group Babcock led the fallers, sliding 4.7%, followed by tech investor Polar Capital. Precious metals producers also came under heavy pressure, with Fresnillo down 4.5% and Endeavour Mining off 4.1%.
The decline follows a chaotic trading session in the US, where stocks initially surged before reversing course as investors digested Nvidia’s forecast-beating earnings alongside a mixed US jobs report.
While Nvidia’s stellar results briefly calmed nerves, underlying concerns remain about the vast sums being poured into AI infrastructure by the companies using its chips.
“The people who are selling the semiconductors to help power AI doesn’t alleviate the concerns that some of these hyper-scalers are spending way too much money on building the AI infrastructure,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
“You have the company that’s benefiting, but the others are still spending too much money.”
The result: a market once again questioning whether the AI boom is built on solid foundations — or sliding toward excess.
