U.S. markets had their worst day since Oct. 10. That marks a sharp reversal for the Dow Jones Industrial Average, which shed 1.65% to settle at 47,457.22, a day after it closed above 48,000 for the first time. Meanwhile, the S&P 500 lost 1.66% and the Nasdaq Composite tumbled 2.29%.

The slump in stocks can partly be traced to a turnaround in sentiment regarding artificial intelligence. Tech behemoths such as Nvidia, Broadcom and Oracle slumped, with the last losing more than one-third in value since it rocketed 36% in September.

Investors, it seems, are growing worried over the high valuations of tech names, as well as the gigantic amount of capital expenditure they are committing to — with some, like Oracle, having to take on debt to fulfil those obligations.

Uncertainty over an interest rate cut in December is also putting a downer on Wall Street. It’s a coin toss as to whether the U.S. Federal Reserve will ease monetary policy then, according to the CME FedWatch tool. That’s a huge difference from a month ago, when traders were pricing in a 95.5% chance of a December cut.

Not having October’s employment and inflation numbers, and possibly never getting them, means the Fed lacks visibility into the state of the economy — and whether it should try to support the labor market or continue reining in inflation.

After all, flying blind makes it hard to see where you’ll land. As of now, that applies both to the Fed and investors trying to navigate the still-hazy ambitions of tech companies.

CEO of Southeast Asia’s largest bank says AI adoption already paying off: ‘It’s not hope, it’s now’

“The proliferation of generative AI has been transformative for us,” DBS CEO Tan Su Shan told CNBC on the sidelines of Singapore Fintech Week. She adding that the company was experiencing a “snowballing effect” of benefits thanks to machine learning. 

Tan expects AI adoption to bring DBS an overall revenue bump of more than 1 billion Singapore dollars (about $768 million) this year, compared to SG$750 million in 2024. That assessment is based on about 370 AI use cases powered by over 1,500 models throughout its business. 

— Dylan Butts

LISBON, Portugal — Top tech executives told CNBC they’re concerned about a bubble forming in the artificial intelligence sector, underscoring growing unease within the industry over soaring valuation.

In recent weeks, markets have been reckoning with the notion that too much capital is pouring into the AI boom, clouding the outlook on revenue and actual profit and putting high valuations into question.

Up to now, warnings around overstretched valuations have mostly come from investors and leaders in the world of finance. Goldman Sachs’ David Solomon and Morgan Stanley’s Ted Pick have warned of potential corrections as valuations of some major tech firms reached historic highs.

The concerns have been crystallized by famed ‘Big Short’ investor Michael Burry, who this week accused major AI infrastructure and cloud providers, or ‘hyperscalers’ of understating depreciation expenses on chips. Burry warned that profits at the likes of Oracle and Meta may be vastly overstated. He recently disclosed put options that bet against Nvidia and Palantir.

However, CEOs of companies who are themselves developing AI, expressed their concerns this week during interviews with CNBC at the Web Summit tech conference in Lisbon.

“I think the evaluations are pretty exaggerated here and there, and I think there is signs of a bubble on the horizon,” Jarek Kutylowski, CEO of German AI firm DeepL, told CNBC on Tuesday.

The sentiment was echoed by Picsart CEO Hovhannes Avoyan.

“We see lots of AI companies raising … tremendous valuations … without any revenue,” Avoyan told CNBC on Tuesday, adding that it is a “concern.”

The market values smaller startups with “just some noise and vibe revenue,” he said, referring to companies being backed even though they have minimal sales.

Vibe revenue is a play on “vibe coding,” a term that refers to using AI to code without needing deep technical expertise.

SINGAPORE – Amid fears of an artificial intelligence bubble, much has been made of recent reports suggesting that AI has yet to generate returns for companies investing billions into adopting the tech. 

But that’s not what the chief executive of Southeast Asia’s largest bank is seeing — she says her firm is already reaping the rewards of its AI initiatives, and it’s only just the beginning. 

“It’s not hope. It’s now. It’s already happening. And it will get even better,” DBS CEO Tan Su Shan told CNBC  on the sidelines of Singapore Fintech Week, when asked about the promise of AI adoption.  

DBS has been working to implement artificial intelligence across its bank for over a decade, which helped prepare its internal data analytics for recent waves of generative and agentic AI. 

Agentic AI is a type of artificial intelligence that relies on data to proactively make independent decisions, plan and execute tasks autonomously, with minimal human oversight.

Tan expects AI adoption to bring DBS an overall revenue bump of more than 1 billion Singapore dollars (about $768 million) this year, compared to SG$750 million in 2024. That assessment is based on about 370 AI use cases powered by over 1,500 models throughout its business. 

“The proliferation of generative AI has been transformative for us,” Tan said, adding that the company was experiencing a “snowballing effect” of benefits thanks to machine learning. 

A major area in which DBS has applied AI is in its financial services to institutional clients, with AI used to collect and leverage data for clients in order to better contextualize and personalize offerings. 

According to Tan, this has resulted in “faster and more resilient” teams. The CEO believes that these uses of AI have contributed to a recent uptick in the bank’s deposit growth as compared to competitors’.

The company also recently launched a newly enhanced AI-powered assistant for corporate clients known as “DBS Joy,” which assists clients with unique corporate banking queries around the clock. 

MIT released a report in July that found 95% of 300 publicly disclosed AI initiatives, encompassing generative AI investments of $30–$40 billion, had failed to achieve real returns. 

However, at least in the banking sector, there are signs that the tides are turning. 

While DBS doesn’t differentiate spending in generative AI from other in-house investments, other major banks have recently offered this comparison. 

JPMorgan Chase CEO Jamie Dimon stated in an interview with Bloomberg TV last month that the bank is already breaking even on its approximately $2 billion of annual investments in AI adoption. That represents “just the tip of the iceberg,” he added.

Those expectations are shared by DBS, which plans to continue to accelerate its AI development to become an AI-powered bank.

The ultimate goal, according to Tan, is for its generative AI to develop into a trusted financial advisor for clients, including retail users who are expected to interact with personalized AI agents through the DBS banking app. 

The bank already has over 100 AI algorithms that analyze users’ data to provide them with personalized “nudges,” such as alerts on incoming shortfalls, product recommendations, and other insights. 

The company has launched several AI reskilling initiatives across departments this year and has even deployed a generative AI-powered coaching tool to support these efforts. 

This will help the company automate mundane work and refocus its staff on building and maintaining human-to-human relationships with customers, rather than reducing headcount, Tan said. 

“We’re not freezing hiring, but it does mean reskilling. And that’s a journey. It’s a never-ending journey … a constant evolution.”