Category: Business

(NEW YORK) — Fears of an artificial intelligence bubble have rattled the stock market in recent weeks and set off concern among critics about a wider risk to the U.S. economy.

A surge of AI spending accounted for roughly two-thirds of gross domestic product growth over the first half of 2025, JPMorgan Asset Management found, outpacing the contribution made by hundreds of millions of U.S. consumers. Many of the nation’s largest companies have poured funds into the chips and data centers necessary to operate AI.

A central question looms over the fate of the technology and the trillions of dollars being spent to develop it: Will AI deliver the type of profits that could turn the product into a moneymaker?

Proponents say a lag between the buildout of AI infrastructure and an onrush of gains is to be expected, pointing to a similar lull after the introduction of other watershed technologies, such as the internet. The widespread adoption of products like OpenAI’s ChatGPT has revealed a massive potential customer base, they add, noting AI firms have prioritized product development over profits.

Critics, however, say the considerable costs have put pressure on AI to deliver stratospheric profits, but little evidence suggests businesses or everyday users will get enough value to warrant forking over a mountain of cash. The technology must deliver within years rather than decades, they add, since the current level of spending cannot be sustained.

“It’s not particularly unusual for a market at this early stage to not be making much profit,” Paul Kedrosky, a venture capitalist and research fellow at MIT’s Institute for the Digital Economy, told ABC News. “Of course, the difference is most markets at this stage aren’t also spending a trillion dollars.”

AI boosters and skeptics alike have raised alarm about the economic stakes. “A reversal would risk recession. We can’t afford to go backwards,” David Sacks, a venture capitalist and White House czar for crypto and AI, said in a post on X on Monday.

Gary Marcus, a professor emeritus at New York University and author, who often criticizes hype surrounding AI, said in a Substack post in September: “It’s not going to be pretty when the music stops.”

A “bubble” is a term used to describe a market in which an asset’s price far outpaces its value on the market. Questions centering on the productivity gains and profitability of AI take up the task of assessing the economic value of the new technology.

Chip giant Nvidia has delivered major profits selling the semiconductors behind AI, becoming the most valuable company in the world by market capitalization. Such success indicates appetite for the building blocks of AI rather than its end uses, however.

For now, AI has failed to achieve gains on a scale near its immense costs, some analysts said. A product like AI would typically generate revenue in the form of sales either direct to consumers or to third-party businesses using the technology to enhance their offerings. AI has faced challenges on both fronts, some analysts said.

Roughly 95% of businesses invested in AI have failed to make money off of the technology, an MIT study in July found, estimating the combined amount spent by the firms is around $40 billion.

“Despite high-profile investment, industry-level transformation remains limited,” the study said.

Consumer-driven profits have also proven elusive. OpenAI’s ChatGPT, for example, boasts about 800 million weekly active users, making it one of the fastest-growing apps ever. That user base makes up about a quarter of the 3 billion monthly active users combined on the array of apps offered by Meta, a company that generated more than $50 billion over a recent three-month period. But OpenAI’s sales do not come close.

OpenAI CFO Sarah Prior told CNBC in September the company is on pace to earn about $13 billion in revenue over the course of 2025, which amounts to $3.25 billion per quarter. On the BG² podcast earlier this month, OpenAI CEO Sam Altman said the company is generating “well more revenue than that.”

Revenue is “growing steeply,” Altman added. “We are taking a forward bet that it will continue to grow, and that not only will ChatGPT keep growing, but we will be able to become one of the important AI clouds, that our consumer device business will be a significant and important thing, that AI that can automate science will create huge value.”

Some analysts said the rapid adoption of chatbots underscores the usefulness of the technology, noting that it paves the way for a potentially significant revenue stream if firms were to populate the AI assistants with advertisements or charge for access.

“It’s the fastest adoption of basically any consumer technology that we know about,” Ethan Mollick, a professor of management at the University of Pennsylvania who studies AI, told ABC News. “There is a path to making money.”

Arun Sundararajan, a professor of entrepreneurship at New York University, said a delay in uptake from businesses is to be expected for a potentially paradigm-shifting technology like AI.

“It’s true that we haven’t yet seen evidence of significant productivity gains from AI investments, but I’m not surprised,” Sundararajan said. “At the early stages of the rollout of a technology like this, there’s a lot of experimentation and learning.”

“As businesses start to understand how to fundamentally change the way that they work using this technology, that’s when you start to see the big productivity gains,” Sundararajan added.

Other analysts disagreed about the likelihood of profits, pointing in part to the challenge posed by infrastructure costs associated with AI.

For many digital products such as software or smartphone apps, the profitability owes to the relatively low cost of providing the service on a massive scale, Kedrosky said. For instance, the initial cost burden of developing a website is significant, but once completed, a website can reach millions of users with little extra cost.

For AI, however, the energy and computational costs increase in proportion to a given number of chat prompts or users, meaning the technology lacks such low-cost scalability.

“Every time you prompt an AI model, it eats up costs to maintain and cool servers. Those costs rise with the number of users. That’s a problem,” Kedrosky said.

The scale of investment also places pressure on AI companies to deliver major profits within a limited timeframe, since the current level of financing cannot continue into perpetuity, Andrew Odlyzko, an emeritus University of Minnesota mathematics professor who focuses on financial bubbles, told ABC News.

“The problem is when you talk about investments in data centers in the trillions of dollars and do the basic financial arithmetic of how much revenue you have to bring in to justify that, it gets into figures larger than total revenues of Google,” Odlyzuko said.

To be sure, some analysts said the technology remains in an early stage of its development, making the outcome uncertain.

“We’re in the early innings,” Vasant Dhar, a professor of data science at New York University who believes AI will ultimately deliver significant profit, told ABC News. “It remains to be seen what form it will take.”

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — Online shoppers set a record high on Thanksgiving, paving the way for gangbusters performance on Black Friday, Adobe data showed.

Digital spending on Thanksgiving jumped 5% from a year earlier, totaling $6.4 billion and exceeding Adobe’s expectations, the firm said.

The company also expects Black Friday shoppers to set a new record, outpacing last year’s total by more than 8%.

Adobe attributed the strong performance on Thanksgiving to better-than-anticipated discounts, especially for electronics. Discounts also touched an array of products from furniture to appliances to toys.

“Given the strength of Thanksgiving deals, Adobe is adjusting its discount forecast for the big shopping days coming up,” Adobe said in a statement to ABC News. “Deals are now expected to be on par with the elevated levels seen in the last holiday shopping season.”

A surge in the popularity of AI retail assistants also contributed to the nationwide shopping spree, Adobe said. AI-driven traffic to online sellers soared 725% compared to last year, the firm said, stemming primarily from chatbots designed to aid consumers.

Shoppers who arrived at a retail website from an AI service were 54% more likely to make a purchase than those who did not, Adobe said.

“The magnitude of discounts was the big story on Thanksgiving yesterday, as retailers leaned into delivering great deals to drive consumer demand online,” Vivek Pandya, lead analyst at Adobe Digital Insights, told ABC News in a statement.

“This was further propped up by impulse-led mobile shopping and the use of generative AI which assisted shoppers in locating the best deals, two trends that helped deliver higher-than-expected overall spend on Thanksgiving,” Pandya added.

The early returns for the holiday shopping season arrive at a wobbly moment for the U.S. economy.

Inflation has picked up in recent months, putting price increases a full percentage point above the Fed’s target of 2%. Meanwhile, hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”

Alongside those headwinds, consumer spending among middle- and low-income Americans has slowed, triggering warnings from restaurant giants such as McDonald’s and Chipotle. A report this month showed consumer sentiment has fallen to its lowest point since a peak of pandemic-era inflation in 2022, University of Michigan data showed.

Retailers hope shoppers defy these trends over the holiday season, when spending typically surges. The outcome could hold significant stakes for the wider economy, since consumer spending accounts for about two-thirds of U.S. economic activity.

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — Blockbuster earnings from chip giant Nvidia this week appeared to rebuke concerns about an artificial-intelligence bubble, briefly ending a days-long slump in the stock market.

“It’s fair to say that Nvidia’s results have completely changed the market mood and pushed out any bubble fears for another day,” said Jim Reid, a research strategist at Deutsche Bank, in a memo to clients early Thursday morning, just hours after the earnings.

But the market went on to offer little reassurance. Shares of Nvidia fell almost 3% in the first post-earnings trading session. The major stock indexes also dropped, underscoring the importance of the technology for Wall Street and the overall economy, which have both come to rely on massive AI spending to propel growth.

Nvidia recorded $57 billion in sales over three months ending in October, the company said on Wednesday, setting a quarterly sales record and demonstrating near-bottomless demand for the semiconductors at the heart of AI.

Still, critics say such appetite for the building blocks of AI has far outpaced the technology’s end uses and financial returns. AI hasn’t delivered much profit, they argue, despite up-front costs totaling hundreds of billions of dollars spent on data centers and chips.

Proponents strongly disagree, pointing to the rapid adoption of products like ChatGPT and counseling patience as other uses of the technology take hold. To hear them tell it, AI is set to augur a tech transformation like the internet or electricity, meaning the hype will ultimately bear out even if some firms falter along the way.

“There is no question that Nvidia will make a bunch of money,” Gary Marcus, a professor emeritus of psychology and neuroscience at New York University, who specializes in AI, told ABC News. “There are many questions about where the market is headed after this initial burst of enthusiasm.”

For his part, Nvidia CEO Jensen Huang rejected AI-related worries during an earnings call on Wednesday.

“There’s been a lot of talk about an A.I. bubble,” Huang said. “From our vantage point, we see something very different.”

The economy is undergoing a technological sea change that extends beyond generative AI, Huang said, noting the rise of advanced software such as cloud computing as well as AI-driven physical products — all of which increasingly run on Nvidia chips.

“Nvidia corporation is unlike any other accelerator,” Huang added.

AI spending is expected to total $375 billion this year, jumping to about $500 billion by the end of 2026, UBS Global Wealth Management found in August. For reference, the half-trillion to be spent on AI next year would be roughly equivalent to the gross domestic product of Singapore.

The AI boom has helped propel U.S. economic growth. Such spending added a 0.5 percentage point boost to annualized U.S. GDP growth over the first half of 2025, accounting for about one-third of economic activity, Pantheon Macroeconomics said.

But analysts fearful of an AI bubble warn of what they consider immense costs, saying energy needs and chip production have saddled the balance sheets of firms developing and operating AI models. Profits may not come for years, if at all, they warn. OpenAI said it expects to begin generating substantial profits in 2030.

Speaking to reporters earlier this year, OpenAI CEO Sam Altman acknowledged frenzied investor enthusiasm but signaled confidence about the long-term outlook for the industry.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman said. “Are we in a phase where investors as a whole are overexcited about A.I.? My opinion is yes. Is A.I. the most important thing to happen in a very long time? My opinion is also yes.”

Tech giants like Amazon and Google retain the capacity to spend without taking on sizable debt, but smaller players require loans, risking credit defaults if the technology fails to deliver on the up-front costs, Marcus said. The potential unpaid loans could strain banks and put pressure on the wider financial system, he added.

“A big question is how much the banks have been propping this up: What will the blast radius be?” Marcus said.

Proponents of AI say such worries are overblown. They point to the popularity of products like AI chatbot ChatGPT, which boasts about 800 million weekly users. Millions of additional users avail themselves of xAI’s Grok, Google’s Gemini and Meta’s MetaAI.

Last year, Apple unveiled AI-fueled tools for its iPhones, Mac and iPad. Some firms are developing a new wave of AI-equipped robots to perform tasks in people’s homes and in workplaces like logistics and warehouses.

“This is the fastest adoption of any technology by consumers by far,” Lynn Wu, a professor of operations, decisions and information at the University of Pennsylvania, told ABC News. “This is a general purpose technology that will be adopted everywhere.”

The profitability of the technology will be made apparent over time as consumers and businesses identify its best uses, Wu added.

“When a general purpose technology — like electricity or the internet — is being adopted, firms and people don’t know how to use it,” Wu said. “We haven’t envisioned how to use this paradigm yet.”

Still, Wu cautioned, an AI bubble likely exists, though it isn’t dangerous. Wu compared the current state of the industry to the internet era before the dot-com bubble, when a host of firms went belly up but the technology reoriented the economy and established corporate giants.

“If you ask me flat out — yes or no — are we in a bubble? The answer is yes,” Wu said. “But the bubble isn’t necessarily a bad bubble.”

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — Stocks ticked downward in midday trading on Thursday, wiping out a rally earlier in the day driven by blockbuster earnings from chip giant Nvidia and a stronger-than-expected jobs report.

The Dow Jones Industrial Average fell about 60 points, or 0.1%, while the S&P 500 declined 0.2%. The tech-heavy Nasdaq fell 0.3%.

Those returns marked a reversal from highs earlier in the day. Previously, the Dow had risen 1.2%, while the S&P 500 had jumped 1.8% and the Nasdaq had spiked 2.5%.

Shares of Nvidia, the $4.7 trillion juggernaut behind many of the chips fueling artificial-intelligence products, ticked down 0.1% in midday trading after having surged upward earlier in the day.

A stock market selloff over recent days underscored the uncertainty looming over the economy as some investors warned of an AI bubble. The earnings blowout from Nvidia late Wednesday appeared to rebuke such concerns, however, temporarily reviving enthusiasm for an AI trade that has propelled much of the market gains this year.

The S&P 500 has soared 15% in 2025, while the Dow has climbed 10%. The Nasdaq has increased 19% this year.

Investors also appeared to draw optimism from a jobs report on Thursday morning, which showed far more hiring than economists’ expected. The fresh data defied a hiring slowdown that took hold over the summer.

The U.S. added 119,000 jobs in September, according to data from the U.S. Bureau of Labor Statistics. That figure marked an acceleration from the previous month, and it exceeded an average of nearly 100,000 jobs added per month over the first half of 2025.

The report included a downward revision for the month of August, however, slashing performance from 22,000 jobs gained that month to 4,000 jobs lost.

An earnings release from Walmart on Thursday morning also exceeded revenue expectations, offering some reassurance about the health of consumer spending.

Inflation has picked up in recent months while hiring has ratcheted down, posing a risk of an economic double-whammy known as “stagflation.”

Those economic conditions have put the Federal Reserve in a bind, since the central bank must balance a dual mandate to keep inflation under control and maximize employment.

In recent months, concern has tilted toward strain in the labor market, prompting the central bank to reduce interest rates a quarter of a percentage point at each of its last two meetings.

On Thursday morning, markets appeared to digest the news as favorable toward a potential interest rate cut at the Fed’s meeting next month. The odds of a quarter-point rate cut ticked up from 33% on Wednesday afternoon to 43% on Thursday morning, according to the CME FedWatch Tool, a measure of market sentiment.

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — Employers hired far more workers than expected in September, defying a sharp slowdown over the summer that appeared to cool off the labor market.

The U.S. added 119,000 jobs in September, according to data from the U.S. Bureau of Labor Statistics. That figure marked an acceleration from 22,000 jobs added in the previous month, and it exceeded an average of nearly 100,000 jobs added per month over the first half of 2025.

The unemployment rate ticked up to 4.4%, but it remained at a historically low level.

A stock market selloff over recent days underscored the uncertainty looming over the economy as some investors warned of an AI bubble. Blockbuster earnings unveiled by chip giant Nvidia late Wednesday, however, appeared to defy such concerns.

Still, mass layoffs at corporate giants like Amazon, UPS and Verizon in recent weeks have drawn attention to a sluggish labor market — and stoked fears that job losses may spread.

It is likely too early to panic, however, some economists previously told ABC News. While the layoffs reflect a weakened labor market and AI adoption in some corners of the tech industry, they added, the prospect of wider job losses remains highly uncertain.

Inflation has picked up in recent months while hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”

Those economic conditions have put the Federal Reserve in a bind, since the central bank must balance a dual mandate to keep inflation under control and maximize employment.

“We have the situation where the risks are to the upside for inflation and to the downside for employment. We have one tool,” Fed Chair Jerome Powell said at a press conference in Washington, D.C., last month. “You can’t address both of those at once.”

Still, Powell said, concern has tilted toward strain in the labor market, prompting the central bank to reduce interest rates a quarter of a percentage point at each of its last two meetings.

“A further reduction of the policy rate in December is not a foregone conclusion — in fact, far from it,” Powell told reporters.

Traders peg the chances interest rates will be left unchanged next month at about 66%, while the odds of a quarter-point rate cut stand at 33%, according to the CME FedWatch Tool, a measure of market sentiment.

On Wednesday, the Bureau of Labor Statistics (BLS) said it would not release a full jobs report for the month of October due to lost capacity during the shutdown. Rather, partial jobs data for October will be released as part of the November report, the BLS said.

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — A long-awaited jobs report to be released on Thursday will offer the latest look at the health of the labor market at a fraught moment for the U.S. economy.

Hiring slowed sharply over the summer, before a government shutdown paused the release of gold-standard federal data for weeks on end. A stock market selloff over recent days underscored the uncertainty looming over the economy as some investors warn of an AI bubble.

Economists expect the U.S. to have added 50,000 jobs in September, which would mark an acceleration from 22,000 jobs added in August, according to a Morningstar analysis of FactSet data.

Still, the anticipated figure would come in well below an average of 97,000 jobs added over the first six months of this year.

Mass layoffs at corporate giants like Amazon, UPS and Verizon in recent weeks have drawn attention to a sluggish labor market — and stoked fears that job losses may spread.

It is likely too early to panic, however, some economists previously told ABC News. While the layoffs reflect a weakened labor market and AI adoption in some corners of the tech industry, they added, the prospect of wider job losses remains highly uncertain.

Inflation has picked up in recent months while hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”

Those economic conditions have put the Federal Reserve in a bind, since the central bank must balance a dual mandate to keep inflation under control and maximize employment.

“We have the situation where the risks are to the upside for inflation and to the downside for employment. We have one tool,” Fed Chair Jerome Powell said at a press conference in Washington, D.C., last month. “You can’t address both of those at once.”

Still, Powell said, concern has tilted toward strain in the labor market, prompting the central bank to reduce interest rates a quarter of a percentage point at each of its last two meetings.

“A further reduction of the policy rate in December is not a foregone conclusion — in fact, far from it,” Powell told reporters.

Traders peg the chances interest rates will be left unchanged next month at about 66%, while the odds of a quarter-point rate cut stand at 33%, according to the CME FedWatch Tool, a measure of market sentiment.

On Wednesday, the Bureau of Labor Statistics (BLS) said it would not release a full jobs report for the month of October due to lost capacity during the shutdown. Rather, partial jobs data for October will be released as part of the November report, the BLS said.

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — Chip giant Nvidia exceeded Wall Street expectations for revenue over a recent three-month period, the company said on Wednesday, rebuking fears of an AI bubble that have hammered markets in recent days.

The California-based company recorded $57 billion in sales over three months ending in October, which beat analyst expectations of $54.9 billion. The jump in revenue marked 62% growth compared to the same quarter a year earlier.

Analysts closely watched Nvidia as a bellwether for the stock market and the overall economy, which have both come to rely on massive spending on artificial intelligence to propel continued growth.

The latest test for the world’s most valuable company arrives at a fraught moment for markets, which have fallen for four consecutive days over fears of an AI bubble. Nvidia, which makes many of the chips fueling AI products, had suffered a decline of more than 10% over a two-week stretch before turning upward on Wednesday ahead of its earnings release.

As big-tech names spend hundreds of billions on chips and data centers necessary for the energy-intensive technology, the financial benefits remain uncertain. The earnings reported by Nvidia gauged demand for a key building block of AI, showing whether appetite for the technology remains at a fever pitch.

The results hold major stakes for the U.S. economy, which has shown signs of strain in recent months as hiring has slowed and consumer sentiment has dampened.

The AI spending boom, a lone bright spot, added a 0.5 percentage point boost to annualized gross domestic product growth over the first half of 2025, accounting for about one-third of economic activity, Pantheon Macroeconomics found.

“There is one company in the world that is the foundation for the AI Revolution,” Dan Ives, a managing director of equity research at investment firm Wedbush, told ABC News in a statement, referring to Nvidia.

Fears of an AI bubble surfaced over the summer ahead of Nvidia’s previous earnings report, but the company defied naysayers.

Nvidia recorded $46.7 billion in sales over three months ending in July, which exceeded analyst expectations of $46.2 billion. The jump in revenue marked 56% growth compared to the same quarter a year earlier.

The company boasts a market cap of $4.5 trillion, making it roughly equivalent to the GDP of Japan or Germany. Nvidia has expanded at a breakneck pace since an AI craze set off by the release of OpenAI’s ChatGPT in 2022, soaring nearly 700% over the ensuing two years.

Alongside continued growth, the company is weathering new challenges. President Donald Trump barred the sale of chips to China earlier this year, before revoking the ban in July. A month later, Trump struck an agreement with Nvidia and its competitor Advanced Micro Devices (AMD) that allowed the companies to sell chips in China if they hand over 15% of revenue generated by the exports to the U.S.

Speaking at the White House in August, the president recounted the agreement.

“I said, ‘If I’m going to do that, I want you to pay us as a country something, because I’m giving you a release,'” Trump said.

Earnings released in August said Nvidia did not sell any of its H20 chips in China over the most recent quarter, but the firm did not mention any losses related to the policy. The H20 chip was specifically designed for sale to China.

In recent days, Nvidia announced a large investment in AI, signaling confidence in the outlook of the technology. Nvidia on Tuesday announced a multi-billion dollar partnership with two of its largest counterparts in AI: Microsoft and Anthropic.

Under the terms of the deal, Nvidia and Microsoft agreed to invest $15 billion in Anthropic, a top developer of AI models. Anthropic, meanwhile, vowed to purchase $30 billion of computing infrastructure operated by Microsoft Azure on Nvidia systems.

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — Financial results to be released on Wednesday by chipmaking-giant Nvidia will be closely watched as a bellwether for the stock market and the overall economy, which have both come to rely on massive spending on artificial intelligence to propel continued growth.

The latest test for the world’s most valuable company arrives at a fraught moment for markets, which have fallen for four consecutive days over fears of an AI bubble. Nvidia, which makes many of the chips fueling AI products, has suffered a decline of more than 10% over the past two weeks.

As big-tech names spend hundreds of billions on chips and data centers necessary for the energy-intensive technology, the financial benefits remain uncertain. The earnings reported by Nvidia will gauge demand for a key building block of AI, showing whether appetite for the technology remains at a fever pitch.

The results hold major stakes for the U.S. economy, which has shown signs of strain in recent months as hiring has slowed and consumer sentiment has dampened.

The AI spending boom, a lone bright spot, added a 0.5 percentage point boost to annualized gross domestic product growth over the first half of 2025, accounting for about one-third of economic activity, Pantheon Macroeconomics found.

“There is one company in the world that is the foundation for the AI Revolution,” Dan Ives, a managing director of equity research at investment firm Wedbush, told ABC News in a statement, referring to Nvidia.

Fears of an AI bubble surfaced over the summer ahead of Nvidia’s previous earnings report, but the California-based company defied naysayers.

Nvidia recorded $46.7 billion in sales over three months ending in July, which exceeded analyst expectations of $46.2 billion. The jump in revenue marked 56% growth compared to the same quarter a year earlier.

The company boasts a market cap of $4.5 trillion, making it roughly equivalent to the GDP of Japan or Germany. The company has expanded at a breakneck pace since an AI craze set off by the release of OpenAI’s ChatGPT in 2022. The California-based company saw its stock price soar nearly 700% over the ensuing two years.

Alongside continued growth, the company is weathering new challenges. President Donald Trump barred the sale of chips to China earlier this year, before revoking the ban in July. A month later, Trump struck an agreement with Nvidia and its competitor Advanced Micro Devices (AMD) that allowed the companies to sell chips in China if they hand over 15% of revenue generated by the exports to the U.S.

Speaking at the White House in August, the president recounted the agreement.

“I said, ‘If I’m going to do that, I want you to pay us as a country something, because I’m giving you a release,'” Trump said.

Earnings released in August said Nvidia did not sell any of its H20 chips in China over the most recent quarter, but the firm did not mention any losses related to the policy. The H20 chip was specifically designed for sale to China.

In recent days, Nvidia announced a large investment in AI, signaling confidence in the outlook of the technology. Nvidia on Tuesday announced a multi-billion dollar partnership with two of its largest counterparts in AI: Microsoft and Anthropic.

Under the terms of the deal, Nvidia and Microsoft agreed to invest $15 billion in Anthropic, a top developer of AI models. Anthropic, meanwhile, vowed to purchase $30 billion of computing infrastructure operated by Microsoft Azure on Nvidia systems.

Copyright © 2025, ABC Audio. All rights reserved.

(NEW YORK) — Web infrastructure company Cloudflare said Tuesday it resolved an issue on its network, which had curtailed access to some popular websites for several hours.

“A fix has been implemented and we believe the incident is now resolved,” Cloudflare said on its status page at 9:40 a.m. ET.

Dane Knecht, Cloudflare’s chief technology officer, posted an apology for the outage around that time, ruling out the possibility of a cyberattack.

“I won’t mince words: earlier today we failed our customers and the broader Internet when a problem in [Cloudflare’s] network impacted large amounts of traffic that rely on us. The sites, businesses, and organizations that rely on Cloudflare depend on us being available and I apologize for the impact that we caused,” Knecht said in a post on X. “This was not an attack.”

Artificial intelligence chatbot ChatGPT and social media platform X, which where temporarily down or limited earlier Tuesday, appeared to be available for users as of 10:30 a.m. ET.

Hours earlier, Cloudflare had issued an alert about a problem affecting “multiple customers.”

“Cloudflare is aware of, and investigating an issue which potentially impacts multiple customers,” the company said at around 7 a.m. ET.

Minutes later, the company said it had begun to resolve the issue. “We are seeing services recover, but customers may continue to observe higher-than-normal error rates as we continue remediation efforts,” Cloudflare said.

Cloudflare helps companies handle user traffic, including efforts to respond to cyberattacks and load information.

On Tuesday morning, a landing page on X alerted ABC News to an “internal server error,” urging users to “visit cloudflare.com for more information.” A similar warning appeared on ChatGPT’s website, telling ABC News to “please unblock challenges.cloudflare.com to proceed.”

X did not immediately respond to ABC News’ request for comment. Neither did OpenAI, the company behind ChatGPT.

This is a developing story. Please check back for updates.

Copyright © 2025, ABC Audio. All rights reserved.