Broadcom Follows Oracle in Letting Down AI-Focused Investors

China has decided to reject Nvidia Corp.'s H200 AI chips, opting instead for domestically developed semiconductors, as stated by White House AI czar David Sacks. This move comes in response to the U.S. strategy that previously allowed Nvidia to sell these chips to approved customers in China, which has now shifted due to national security concerns.

Shares of companies involved in artificial intelligence infrastructure have significantly declined following Oracle Corp.'s announcement of delays in its data center projects, which compounded existing concerns after Broadcom Inc.'s disappointing earnings report. This selloff has raised alarms among investors about the stability of AI-related stocks.

A significant sell-off in technology stocks led to a 1% decline in the S&P 500 index, driven by disappointing earnings from Broadcom Inc. and renewed concerns regarding Oracle Corp.'s data center completion timelines, which have sparked anxiety about the artificial intelligence sector's future prospects.

Rivian Automotive Inc. experienced a significant drop in its stock price following the announcement of its proprietary artificial intelligence chip aimed at enhancing self-driving capabilities, intended to replace Nvidia Corp.'s technology. This move is part of Rivian's broader strategy to innovate within the competitive electric vehicle market.