Plato Investment Management’s head of long-short strategies David Allen said
Thursday’s selloff reflected investors confusing AI’s transformative potential
with whether related investments will produce returns; the Nasdaq 100 plunged as
investors sold US tech amid speculation congressional Democrats will tighten AI
regulation. Allen said hyperscale cloud providers are locked in a survival
competition and that midterm election results served as the immediate catalyst
for the decline. Antipodes Partners portfolio manager Vihari Ross said the
selloff is a market-led reassessment of the practical constraints on the next
phase of AI investment — heavy debt financing (making funding costs and interest
rates critical), the need for large, reliable power supplies, and whether end
demand can sustain current assumptions.
