The tech-heavy Nasdaq closed yesterday down 1.4% in the biggest one-day drop in three weeks. Nvidia dropped 3.5%. Palantir sunk 9.4%. Arm was down 5%. AMD was down 5.4%.

The pain wasn’t limited to one exchange or market, either. NYSE-listed Oracle was down 5.9%. Bitcoin dropped 2.7%. The S&P 500 fell 0.7%. The markets in Japan, South Korea, and Hong Kong were all down, too.

Why? In a word: Jitters. That recent MIT report concluding that “95% of organizations are getting zero return” from generative AI investments may have started to sink in. OpenAI CEO Sam Altman’s recent remarks about investors getting burned in the AI bubble didn’t help, either. (Things investors don’t like to hear: “Some investors are likely to lose a lot of money.” 🥴) 

Or maybe it’s just a small correction. Either way, hang tight. Today’s tech news below. —Andrew Nusca

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Wall Street isn’t worried about an AI bubble. Sam Altman is

Yuichi Yamazaki/AFP/Getty Images

Wall Street analysts are confident the artificial intelligence boom still has room to run. Even if Sam Altman, the OpenAI chief executive at the center of it all, appears less confident.

Speaking to reporters over dinner late last week, Altman drew a parallel between today’s AI frenzy and the 1990s dotcom bubble, when internet company valuations spiked dramatically before crashing.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman said, in comments reported by The Verge. “If you look at most of the bubbles in history, like the tech bubble, there was a real thing. Tech was really important. The internet was a really big deal. People got overexcited.”

He added: “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes.”

Altman warned that some investors are likely to get “very burnt” as some of the hype unwinds, but maintained that the long-term value created by artificial intelligence will outweigh short-term losses.

Investors have had a reason to cheer in recent weeks, as major tech companies reported earnings that exceeded expectations. Microsoft, Alphabet, and Meta all posted strong growth and showed no signs of pulling back on AI.

Altman’s company is no different.

“You should expect OpenAI to spend trillions of dollars on data center construction in the not very distant future,” Altman reportedly said. “And you should expect a bunch of economists wringing their hands, saying, ‘This is so crazy, it’s so reckless.’” —Beatrice Nolan

Meta reportedly mulls downsizing its AI division

The “move fast and break things” mantra remains alive and well at Meta.

After spending lots of time resetting the social media company’s AI strategy—and gobs of money hiring the best technical talent imaginable—Meta is making even more changes.

The company has reportedly announced in an internal memo that it will split its rapidly growing “Meta Superintelligence Labs” unit into four groups. 

One group will focus on AI research, a second will focus on products, a third on data center infrastructure, and a fourth on superintelligence itself. (Superintelligence refers to AI that surpasses human intelligence.)

A New York Times report notes that some Meta AI executives are expected to leave the company. Other Meta AI employees may be reassigned or laid off as the company recalibrates its AI resources.

Most interesting of all, Meta is considering using third-party AI models to power its products, according to the report, either by licensing “closed” models or building on “open” ones. (Meta’s previous frontier model, Llama 4 Behemoth, was open; its current work is in service of a closed model. Cue the existential crisis.)

It was only two months ago that Meta shocked the industry with a major investment in Scale AI and the hire of its CEO, Alexandr Wang, as the company’s chief AI officer.

The arrival of Wang and scores of highly paid AI talent—among them ChatGPT co-creator Shengjia Zhao, former GitHub CEO Nat Friedman, and Safe Superintelligence co-founder Daniel Gross—has created “tensions” between “old guard” and new, according to the Times,  that a reorganization may partially alleviate. —AN

Women are missing from boards and the c-suite in newly public companies

Investors are pouring money into initial public offerings like it’s 2021, with this season alone unleashing several new tickers, including FIG, BLSH, and soon, STUB. 

For some, the surge is a welcome sign of renewed optimism after tariff-related chaos in the spring threatened a promised IPO revival. 

But an analysis of recent filings shows that women leaders are largely missing from the boards and executive teams at the vast majority of new public companies.

Damion Rallis, co-founder of Free Float Analytics, combed through information about 61 companies that filed IPO-related documents in the first two weeks of August. 

He found that nearly 88% of the firms (most of which were in tech) had only one or no women on their board of directors, while 93% had only one or no women in their C-suite. 

Only seven of the 61 companies Rallis examined had two or more women on their boards, while only four listed two or more women executives. In total, women represented only 12% of the 349 directors and 11% of 205 executives identified in the filings.

For reference, women represent about 30% of board members at Russell 3000 companies, according to recent studies, and 29% of C-suite roles, according to a 2024 McKinsey survey.  

Despite recent policy shifts, most investors have come to expect companies to form diverse boards and C-suites as part of optimizing a leadership team. 

Not so for this latest cohort, says Matt Moscardi, cofounder of Free Float Analytics.

“You’d expect them to look and say, ‘Well, you’re going to IPO, what do other publicly traded companies look like?’” he told Fortune, “and there is basically no effort to do that.” —Lila MacLellan

More tech

—U.S. demands equity stake in Intel. Commerce Secretary Howard Lutnick says the chipmaker must make a deal in return for CHIPS Act funds.

—VW subscription drama. Buyers are not keen to pay extra to unlock 20 horsepower on a Volkswagen vehicle.

—Tether hires Trump’s top crypto official. Bo Hines will help lead U.S. stablecoin expansion.

—Sergey Brin, centibillionaire: “60 hours a week is the sweet spot of productivity.”

—Massive data center campus comes to Texas. Vantage Data Centers will spend $25 billion for a 1.4 gigawatt facility in Shackelford County.

—AI will cut nearly $1 trillion a year out of S&P 500 budgets, Morgan Stanley says.

—U.S. man charged with operating Rapper Bot. It’s considered one of the most powerful DDoS botnets ever.

—Databricks is fundraising at a $100 billion valuation, or about double the value of General Motors.

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