America has financed a current account deficit that bloated to US$1.2 trillion in 2024 by selling tech stocks to foreigners. Tech stocks, meanwhile, are trading at valuations not seen since 2000, when the NASDAQ Composite began a descent that wiped out 75% of its market capitalization by 2002.
Could a tech crash turn into a funding crisis for the United States if expectations sour on the revenue prospects of artificial intelligence? The January 27 crash in AI-related stocks in response to cheaper and better Chinese competition raises troubling questions. These questions have the undivided attention of every equity investor in the world.