CNBC columnist challenges AI selloff narrative as chips, CoreWeave slide

The column described Friday as an "obliteration." It said semiconductors had fallen for nine straight sessions, CoreWeave had returned to the level of a previous plunge, and memory stocks had sold off.

The columnist said the market acted as if the data-center story—a $1.2 trillion or $12 trillion "super-cycle"—was over, and as if investors should rotate into defensive consumer staples including Colgate-Palmolive, Coca-Cola, Procter & Gamble and Kimberly-Clark.

He questioned whether the reaction had run ahead of a cause. He said the selling was concentrated in data-center and AI components that represent about 25% of the market’s market capitalization, though their absolute share is far smaller.

The column speculated that last week’s move would prove to be an unwind of certain firms’ positions combined with the collapse of a hedge fund the market has never heard of, which borrowed billions from a firm that has not disclosed its losses. The columnist did not name the firms or the fund.

Much of the column focused on Nvidia and CEO Jensen Huang. It said Huang has provided seed money in a venture-capital-like manner, helping OpenAI, Anthropic and, to a lesser extent, Alphabet’s Google Gemini capitalize on generative AI at scale. The column linked that financing to CoreWeave’s rise in corporate bond yields and said the marginal buyer is now being margined out by the bond market.

The column said skeptics compare Huang’s approach to Lucent’s vendor financing at the turn of the century, which masked weak demand by financing customers. The author wrote that he once blew the whistle on similar vendor-finance activity when he ran TheStreet.com, but he urged readers not to judge Huang too quickly and said now is not like then. He wrote that in 2000 vendor financing obviously benefited the vendor because the end product was not needed.