AI's gravitational pull on the stock market persists … and this time it's pulling the market down instead of up.

(Source: The Guardian, "Global stock markets fall sharply over AI bubble fears")

People keep asking me what this means, and whether this marks the beginning of the end for genAI.

My take: who knows?

We're talking about a future event, so nothing is certain. Maybe genAI takes off again, maybe it falls over, maybe it holds steady …

Viewing this through the lens of risk management, what matters most is your exposure to the AI sector:

1/ If you've invested in genAI (either by buying shares or selling AI products): You knew from the start that this could go either way. So long as you've done your homework, you're fine. And if you haven't done your homework … well … time to get to it.

2/ If you have not invested in genAI: I'm sorry to say that you are still kind of an investor. That's because you do business with the companies that have invested directly, so you now hold indirect exposure to the ups and downs of the genAI space.

As I noted in my newsletter a couple of weeks ago:

I hold similar concerns about genAI. It's one thing to say "the quirky chatbot shut down" or "a few startups collapsed." But between the money and people pouring into the sector, the companies caught up in it, the investments (both individual and group-retirement plans) fueling it, and now governments that are hell-bent on some bullshit "AI arms race," we have a problem. Even the most AI-skeptical individual still holds exposure to that sector. They will be affected if and when things come crashing down.

Hopefully things keep going up. Or should they fall, that it's a soft landing.