😸 $800B gone in a day

PLUS: Big news about GPT-5…

Welcome, humans.

We got some great responses to yesterday’s new section, “What gives it away that this video is AI.” Here are a few we thought were spot on::

M.B.: “The uncanny valley in Gandalf's face gives it away.”

S.M: “The Gameboy text is an obvious AI generated disaster. If I wasn't watching to work out if it was fake it would fool a lot of people”

A.L.: “Fixing a car with a paintbrush that turns into a hand.” (Yup, that’d do it!)

Here’s what you need to know about AI today:

AI-heavy tech stocks plummeted $800B in one day.
Nvidia was accused of scraping millions of videos without permission for AI training.
A YouTuber sued OpenAI over alleged unauthorized use of video transcripts.
AI chip startup Groq raised $640M to make AI models run way faster.

Advertise in The Neuron here.

It was a bad day for AI stocks yesterday—but not as bad as you think.

It was a day of “AI trade carnage”, some headlines read. “Global Selloff Sinks Tech” read another. “The long awaited AI reckoning”, read one more.

Is this it? Is this “the big one”? Is it time to pack up the newsletter and dust off our resumes?!

Not exactly.

Here’s what really went down:

Yesterday was a no good, particularly bad day for the Magnificent 7—the top 7 big tech stocks, who are all spending big on AI (and when we say big, we mean ~$50 billion just this quarter).

As the headlines above suggest, investors have been questioning whether all this AI spending will be worth the ROI.

Well, over the past 3 days, the Mag 7’s lost about $1.3T in market cap ($800B lost yesterday alone!).

Nvidia had a particularly bad ride. Their stock slipped 6% (the day’s biggest loser alongside Apple). It’s facing a DOJ antitrust probe, product delays, and now there’s leaks claiming the company will discontinue their most popular consumer GPU. Other AI chip stocks also felt the heat.

Some have compared this sell-off to the summer of 2000, before the dot-com bubble burst. It’s a good comparison, with some key differences.

So is this the AI bubble burst we were promised? Today was not just about AI. First of all, this sell-off may have hurt the Mag 7 the most, but analysts are saying it was driven by a bad jobs report (4.3% unemployment), not just “AI panic”. That selloff was last week. Or was it the week before that? Or 3 weeks ago?

At one point during the day, over $2 trillion had been wiped out from the entire U.S. stock market. So it was more of a macro thing.

In actuality, there’s just a metric ton of uncertainty in the world right now, and markets hate uncertainty.

If When AI hype does come back down to reality, it will be probably a good thing for the industry in the long term, anyway.

Oh, and it goes without saying, but this isn’t investing advice!

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Around the Horn.

Two of OpenAI’s cofounders, including Greg Brockman, as well as a top product leader, are leaving the company.
Nvidia scraped millions of videos from YouTube, Netflix, and other places to train an unreleased AI model called Cosmos—without permission (according to leaked docs).
A Youtuber (David Millette) filed a class action lawsuit against OpenAI for allegedly training its models on millions of Youtube transcripts.
Groq, the AI chip company who sells “tokens as a service” just raised $640M for its LPU chips—specialized chips optimized for large language models like ChatGPT.
Elon Musk reopened his lawsuit against OpenAI for being “closed AI” and converting from a non-profit into a “For Profit company”.
OpenAI won’t announce GPT-5 at its developer conference this fall.

Treats To Try.

*Incogni removes your personal data from the open internet so scammers and identity thieves can’t access it. Protect yourself online with Incogni—get 55% off with code NEURON.
Udio launched v1.5, an upgraded AI music generator with improved audio quality, key control, and expanded language support, alongside other new features.
Wondercraft Audio Studio simplifies audio ad creation for various platforms with text prompts, realistic voices, royalty-free tracks, and collaboration tools.
ChatPlayground.ai combines multiple AI models into a single extension, offering tools for chatting, web browsing, writing, and image generation to enhance productivity.
Placer.ai provides location + foot traffic insights for businesses, offering data on consumer visits, market trends, and property performance (raised $75M).
Heeyo is a learning companion for kids (ages 3-11), featuring 2000+ educational games, customizable AI friends, and multilingual interactions (raised $3.5M from OpenAI).
Hedra provides AI tools for creating custom video characters and virtual worlds, with their Character-1 model currently in beta. (raised $10M).
Dobror unifies multiple email accounts into one UI, classifying emails and reducing distractions through features like focus mode and task management.

*This is sponsored content. Advertise in The Neuron here.

Tuesday Ticker

Here are the results from last week’s poll:

J.B. chose Siri acting inside apps: “This will save soooo much time with not having to bring up apps and enter info and hope for the right response. if an agent can do that for me, I might never have to leave the couch!”
K.F. chose Image and emoji generation: “Cannot wait to create my own emojis”
M.J. chose Enhanced Siri that understands: “Siri has never understood me, but ChatGPT got me right away. Looking forward to renewing a better relationship with Siri.”