I doubt Friday was as bad as it will get, so the title of this essay (“AI’s Black Friday”) is a bit tongue in cheek. But Friday was bad; across the tech industry something on the order of half a trillion dollars of market value disappeared overnight.
The Dow was down, but only 1.35%. Chip companies (NVidia, Broadcom, Micron) GPU leasers (CoreWeave and Nebius) and some other major AI related companies (Oracle, Microsoft, Meta, etc) all took larger hits:
The S. Korean market, heavy on semiconductors, was also down.
Global Markets Investor@GlobalMktObserv
🚨South Korea's AI-driven stock market bubble is showing its first serious CRACKS: The KOSPI plunged -5.5% on Friday, with Samsung Electronics falling -6.4% and SK Hynix collapsing -9.9%, as the global AI selloff triggered by Broadcom's disappointing earnings forecast spread
7:53 AM · Jun 5, 2026 · 21.3K Views
11 Replies · 73 Reposts · 256 Likes
And that wasn’t even the worst of it. Maybe this revelation was:
Edward Dowd@DowdEdward
Wow…this is a tell people. There is no path to profitability. They need to socialize losses.
CNBC Tech @CNBCtech
Trump administration, OpenAI discussing possible government stake in the AI startup https://t.co/NrptJTDAWY
6:11 PM · Jun 5, 2026 · 447K Views
219 Replies · 1.68K Reposts · 7.69K Likes
Remember this tweet?
Gary Marcus@GaryMarcus
The countdown until we are told that LLMs are “too big to fail” starts now. “We can’t afford to lose to China”, they will say, accepting their multibillion dollar bailouts.
8:14 PM · Jan 6, 2025 · 470K Views
41 Replies · 225 Reposts · 1.74K Likes
The game is on. “Investment” is just another word for bailout.
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I had this to say about that:
In short, it stinks.
Garry Kasparov@Kasparov63
Smells like corruption and socialism, the hallmarks of the Trump administration.
Gary Marcus @GaryMarcus
smells like bailout. smells like garbage. 🤮
3:53 PM · Jun 6, 2026 · 2.48K Views
7 Reposts · 38 Likes
Bailing out OpenAI is crony socialism and corruption (remember those $25M donations from Greg Brockman and his wife?), preventing capitalism from taking its natural course.
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But it’s not just OpenAI:
The Washington Post@washingtonpost
President Trump said he is considering taking a government stake in leading artificial intelligence companies. Industry leaders will soon gather at the White House to discuss the idea, the president said.
wapo.st
Trump says he’s considering government stake in top AI companies
10:15 PM · Jun 5, 2026 · 82.4K Views
110 Replies · 91 Reposts · 176 Likes
As an important aside that is more about geopolitics than economics per se, the ramifications of this may be huge. As I noted on X, nobody is going to trust an American AI company that is partly owned by the US Government. Just the way the US doesn’t trust Huawei, Europe and Asia are not going to trust companies like OpenAI and maybe even Google. The new cold war will be about AI. (And Google might perhaps be wise not to accept Trump’s proffered investment, given how much of their income is global; OpenAI may be so desperate they have no choice.)
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But back to economics. Who can forget the hapless Meta, which may ultimately win the prize for most money burned vs least results?
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Meanwhile, it also came out yesterday that Musk is leasing another 110,000 GPUs to Google, on top of the 220,000 it is leasing to Anthropic.
Sawyer Merritt@SawyerMerritt
SpaceX has just announced that they have entered into a $920 million per month agreement with Google to provide compute capacity, according to a new filing. "On June 5, 2026, we entered into a Cloud Service Agreement with Google with respect to access to compute capacity. The
6:58 PM · Jun 5, 2026 · 1.71M Views
377 Replies · 870 Reposts · 7.74K Likes
Last year, people had to steal GPU’s from armored trucks.This year, SpaceX’s AI division is leasing GPUs left, right, and center, because they can’t figure out what to do with them.
If scale was “all you need”, or if AGI was actually nigh, Elon would be hoarding LLMs, not leasing them.
Some people might ask whether Elon is making money on the deal (I don’t know), but the real question is why he is leasing the very chips that he hoarded last year in the first place.
Gary Marcus@GaryMarcus
Elon, last year: Grok 5 has a 10% chance of becoming world’s first AGI. Elon, this year: Never mind, we’re gonna be like CoreWeave, but bigger.
Elon Musk @elonmusk
My estimate of the probability of Grok 5 achieving AGI is now at 10% and rising
1:05 AM · Jun 6, 2026 · 1.87K Views
3 Replies · 4 Reposts · 17 Likes
Whether SpaceX is making money on the deals with Google and Anthropic or losing money, they are waving the towel on winning the frontier model race— by arming their competitors rather than themselves.
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Also, per a friend who read a draft of this, “If Space X is leasing capacity back to Google and Anthropic, this is now servers and chips those guys do not need to buy themselves. Elon clearly bought a lot of hardware he did not have demand for. He is probably not the only one that bought substantial capacity long before there was demand or a use case for it.”
None of that is particularly great for Nvidia, CoreWeave, Oracle, Nebius, Micron, and a variety of other hardware and semiconductor providers
And my friend adds, “Then of course the fact that even Google and Meta, who are [historically] very cash flow positive companies, need to sell equity to continue to fund their AI investments. Just shows you this whole thing is a black hole.”
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I’ll leave you with these predictions, written a few days ago, before the shit started hitting the fan:
I have no idea whether Monday’s market will continue the downward trends we saw Friday. But it should.
Coming soon: more on why AI has had less impact on real-world productivity so far than many people had anticipated.