A sudden shift in sentiment around artificial intelligence (AI) has investors and businesses taking a closer look at the tech sector. Industry stumbles are making headlines, with Meta, OpenAI, and Coreweave facing challenges that have sparked concerns about an “AI winter.”
Meta recently froze hiring and is considering downsizing its AI division, while Sam Altman, CEO of OpenAI, has expressed concerns about a potential bubble. The company’s ChatGPT-5 model, touted as a PhD-level game-changer, has failed to deliver expected results.
Researchers at MIT found that 95% of generative AI programs launched by companies failed to meet their intended revenue-generating goals. Anthropic and OpenAI have also struck deals with the US government for minimal costs, despite burning through cash.
Investors are rushing to buy “disaster puts” as a hedge against potential market declines, citing concerns that the current situation may lead to a larger correction. While some analysts believe this is just a pause before investors reassess their tech positions, others argue that the AI bubble bursting was never going to be a single event.
“The bubble bursting was never going to be one event, but a series of sentiment shifts against technology,” says Ed Zitron, a tech writer and host. “We need actual returns from these companies, which none have shown.”
Source: https://edition.cnn.com/2025/08/22/business/ai-vibe-shift-nightcap