Tech’s AI Hangover Might Just Be Getting Started

One thing already seems certain about 2024: AI is going to need to start showing the money. Whether it can is a whole other question.

Excitement for generative artificial intelligence sparked by OpenAI’s chatbot was the dominant theme for investors in 2023. The Nasdaq Composite jumped 43% for the year—its second-best annual performance in 15 years. Meanwhile, technology and e-commerce companies on the S&P 500 averaged a gain of 57%, more than double the broad index’s overall performance for the year. Indexes tracking subsectors such as chips and software recorded their best annual gains since 2009, when the market was bouncing back from the global financial crisis.