Investors are hitting pause on the AI run-up. According to Axios, chip stocks that had soared over the past year are now slumping from their record highs. The Nasdaq fell three point three percent Tuesday, and individual stocks like Micron Technology dropped more than thirteen point two percent. This is a reality-check moment in the AI buildout. While compute costs outside of frontier models are falling, companies are realizing they've been spending heavily without understanding where the money goes. A KPMG survey found that only twenty-six percent of U.S. executives have full visibility into their AI operating costs—and many are burning through budgets faster than expected. Uber, for instance, exhausted its entire twenty twenty-six AI spending budget in just four months. But here's the tension: demand for AI compute still vastly outpaces available supply. So the pullback isn't about fundamentals changing—it's about investors getting more selective about which AI bets actually pay off.

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