Global stock markets experienced a significant downturn as the sell-off for artificial intelligence (AI) sector leaders intensified, driven by concerns over overvalued tech stocks and potential sustainability issues in demand for computer hardware.The S&P 500 fell 1%, marking its first losing week in three months, while the Nasdaq composite dropped 1.4%.Companies like Nvidia, Applied Materials, and Micron Technology saw sharp declines, with Nvidia losing 2.2% and Applied Materials dropping 5.6%.The sell-off was exacerbated by geopolitical tensions, particularly the ongoing conflict with Iran, which pushed oil prices higher.

Meanwhile, Chinese AI developments, such as the Moonshot startup's Kimi K3 model, raised fears of reduced demand for semiconductors and tech components.European markets showed milder fluctuations, but tech-heavy indices in Asia, including Taiwan and Shanghai, plummeted by 3-7%.Analysts warn that AI's projected impact on productivity may not meet expectations, leading to a reassessment of valuations for tech stocks.The market volatility highlights the delicate balance between innovation-driven growth and financial risks in the AI sector.