The advent of AI was clearly a fortunate development for NVIDIA and for other companies that have established themselves firmly in the AI industry. But even in such a promising market, there is rarely a straight path for a company, and we are seeing signs of that now as the stock prices of Envidia and other AI companies are beginning to fall.

As the BBC notes, the stock prices of many tech companies have fallen in both the US and Asia. This includes Nvidia, whose stock price fell 6.8%. Other companies facing losses include Google's parent company Alphabet, Apple, Microsoft, and Tesla.

As much as we PC gamers may sometimes hate to admit it, Nvidia is now an AI company, not a PC gaming company. And while the company was a titanic supplier to the data center industry even before AI, since the AI boom the company has skyrocketed in every metric and is now the number one seller of chips for AI workloads. NVIDIA became the world's most valuable company just a month ago.

And we should certainly remember this when we hear about falling stock prices. NVIDIA remains the AI giant it was until last month, just as other AI companies are currently in the doldrums. To take another example, chipmaker SK Hynix is one of the Asian companies whose stock price has fallen, according to the BBC, but also posted its highest quarterly profit since the third quarter of 2018 (via Reuters). This was thanks in part to demand for high-bandwidth memory (HBM), which the company sells to Nvidia. [While the stock price does not reflect the overall health of a company, it certainly indicates corporate value and future worth. A falling stock price means that the company's shares have begun to sell at progressively lower prices, which may appear to be a race to the bottom, wherever the bottom (the new stock price) is. If this is the case, the market may believe that the company is overvalued relative to where it will end up in the future.

But this is all incredibly relative. NVIDIA is booming and rising at an incredibly fast pace, reaching such heights that a short-term downturn may be almost meaningless. It may be as simple as investors selling while things are good. It certainly doesn't mean that things will get worse in the future, but it just doesn't guarantee that some investors will be in much better shape than they are now.

Of course, companies should not think in general terms either. The downturn appears to apply to the entire AI industry, suggesting broader market concerns: according to the BBC, Jun Bay Liu, a portfolio manager at Tribeca Investment Partners, said, “Investors are now concerned about spending on AI that has no revenue effect. It's getting to be.

To me, this all means that the huge and highly exaggerated market will eventually and naturally level off. However, I know very little about this and several people more knowledgeable than I have pointed out the ridiculously huge amount of money needed to keep the AI bubble afloat. The market's understanding of this means that investors will be more return oriented, which may cause some investors to sell quickly, causing the stock price to fall.

In any case, as a reminder that Western governments are united in their efforts to prevent AI from becoming a monopoly, these stock price swings also remind us that AI is not just a technology or tool, but an industry with a market just like any other industry. And markets ebb and flow.