US tech stock rout: is the AI bubble bursting?

Shares on Wall Street plunged on Thursday, in a rout driven by AI and technology stocks that extended to Asia and Europe on Friday. US markets rebounded after trading reopened in New York, but failed to recover all of the lost ground amid lingering concerns of a relapse in selling pressure.

More than $3.2tn (£2.4tn) was wiped from the value of the US stock market on Thursday – bigger than the annual output of the Canadian economy – after the tech-heavy Nasdaq fell by 5.5% and the blue-chip S&P 500 fell by 4.4%.

After months of warnings over the valuations of AI companies – amid fears of tinderbox conditions in the world economy fuelled by the Iran war and concerns that the tech bubble could burst – the trigger for…