By Abdurrahman Yıldırım
The stock markets seem to be showing a familiar fear again. The worship investors had for Artificial Intelligence (AI) in recent years has finally started to bleed out. Until a few weeks ago, giants like Nvidia with a market cap of 5 trillion dollars and Palantir with a price-earnings ratio of 700 symbolized endless growth. However, the first week of November painfully showed how fragile this “AI Revolution” story really is.
### 3.4 TRILLION DOLLARS WIPED OFF FROM STOCK MARKETS
➔ Stock markets are bleeding. The Fear Index VIX again surpassed 20. Compared to its peak on October 29,
**S&P 500 fell 2.8%, Nasdaq (with tech-heavy stocks) dropped by 4.2%, and the “Magnificent 7” stocks decreased by 4.8%.**
**The total loss across all world stock markets was about 2.3%.** On October 29, the combined market value stood at a record 149.2 trillion dollars, but by November 7 it fell to 145.7 trillion, a decrease of 3.4 trillion dollars.
➔ This is not just profit-taking, but seems to be a strong crisis of confidence fueled by a toxic cocktail from three fronts. The markets are under pressure from three concerns: technology bubble risk, fear of job losses, and government fiscal deadlock.
➔ Let’s examine these three anxiety sources that are poisoning the market…
### 1-TECHNOLOGY BUBBLE RISK
➔ Sharp market fluctuations lately have centered around excessive investments in AI stocks and the sustainability of these investments. The rally led by tech giants such as Nvidia is now fearing its own shadow.
➔ Capital flowing into AI companies was fed by expectations. If real productivity increases and broad-based revenue growth have yet to confirm these expectations, prices have already discounted future profits. This can result in either gradual correction or sharper crashes via panic selling.
➔ The dream of grabbing the cream of AI through heavy investments, notably in data center constructions, has increased the risk of local bank failures due to non-recoverable loans. Excessive investments beyond needs are now facing correction risks.
➔ AI incentives are still demanded, with calls for the Trump administration to treat AI like cryptocurrency and incentivize it similarly.
➔ The call to investors is clear: verify expectations with data. Without company revenues, cash flows, and real-world application examples, betting only on potential is gambling.
### NVIDIA CEO’S BACKFIRED WARNING
➔ As AI attracts unlimited capital, the delay in creating economic value causes excess capacity, bad loans, and adds pressure to the markets.
➔ The reason for the call for state support in AI, similar to crypto support under Trump’s government, is this.
➔ Nvidia’s CEO Jensen Huang, in an interview with Financial Times, used a “rewind” tactic to pressure Trump and the US government into incentives. However, his statement that “China is likely to win the AI race” backfired.
➔ Huang’s remarks questioned the US leadership and acted as a boomerang. After November 3, Nvidia’s shares dropped by 15%, and its market value lost half a trillion dollars, falling from 5.1 trillion to 4.6 trillion dollars. This pulled the whole market down.
### 2-LONGEST GOVERNMENT SHUTDOWN CRISIS
➔ Another factor exhausting the market is the US government shutdown entering its fifth week, the longest in US history.
➔ Estimates say this means a weekly GDP loss of between 10 to 30 billion dollars.
➔ Food aid for 42 million people stopped. 23% of federal employees were furloughed without pay.
➔ Worse, aviation safety is threatened. Although planes operate 24/7, some air traffic controllers don’t show up, and others work excessive hours, risking accidents. Indeed, flights started to be canceled.
➔ With halted aid and salaries, consumer spending plunged, and small businesses struggled. Political deadlock leads to severe paralysis.
➔ Even the Fed’s expected interest rate cut became unclear due to delayed economic data.
### 3-AI-DRIVEN JOB COLLATERAL DAMAGE
➔ The biggest catastrophe comes from AI-driven unemployment. It’s not just about costs. The wave of AI-caused unemployment is no longer a future issue but a present fact.
➔ AI may be the future of the global economy, but in the short term, accompanying job losses, inequality, and financial bloating threaten system balance.
➔ The public and private sectors must rethink hundreds of thousands of workers amidst digital transformation.
➔ In 2025 alone, Microsoft, IBM, and Google accounted for 78,000 AI-related job cuts. Worse, the government won’t recall all workers after reopening.
➔ AI applications quietly replaced routine tasks. Goldman Sachs predicts unemployment may rise by 0.5 points during this transition, while Northeastern studies show 50% of entry-level white-collar jobs at risk.
➔ This creates a “jobless profit explosion” where companies preserve margins, but the middle class’s purchasing power and demand are crushed. Tweets about “AI massacre” are not baseless.
### THE COST OF TRANSFORMATION
➔ The question is: Are we entering an age of AI or an age of its side effects?
➔ Capital still flows into tech but now out of habit rather than hope. Every tech story growing without real productivity eventually ends with a sharp correction.
➔ Today’s slump may not be a collapse but a “reality check.”
➔ AI is not just tech; it is an economic, social, and political transformer. The markets’ current shock reflects the immediate cost of this transformation.
➔ Without smart, transparent, and fair policies, businesses lose not only profits but legitimacy.
➔ The market fall is not an end but a recall: without real productivity and inclusive policies, rises will be sharply corrected one day.
### PAINFUL AWAKENING PHASE
➔ Is this correction inevitable? Maybe. Is it controllable? Yes, if brave, targeted, and responsible steps are taken.
➔ Yes, a correction is coming. But it is not an apocalypse, instead a necessary market psychology reset. The market is shifting from AI hype to real investment valuations, and this will be bloody.
➔ Last-minute government reopening and Fed rate cuts can trigger recovery.
➔ But extended shutdowns or uncontrolled AI-driven white-collar unemployment can crush consumer demand during the Christmas season.
➔ If fear returns, big opportunities also knock. But this time, only those investing not in promises but tangible AI benefits will win.
➔ Seen this way, these are not corrections but a painful rewriting of AI era rules.
➔ Smart investors take positions after the dust settles.
Source: https://www.haberturk.com/ozel-icerikler/abdurrahman-yildirim-1018/3836673-yapay-zeka-sarhoslugu-bitiyor-mu
