Technology
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Technology
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Tech stocks return to earth as AI explosion fizzles
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The world’s biggest technology companies saw their stock prices tumble over the past month as wider tumult in the market hits the tech sector hard after years of steep gains driven by artificial intelligence (AI).
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Since major advancements in AI exploded onto the scene a little more than two years ago, tech stocks have been on a tear, driving much of the market’s gains.
However, this success has come back to bite the industry, combined with the uncertainty surrounding President Trump’s tariffs and questions about the future of AI.
“Tech has become a victim of its own success,” said Callie Cox, chief market strategist at Ritholtz Wealth Management.
“That doesn’t necessarily mean the tech sector’s story has imploded,” she continued. “It’s just that the expectations for tech have grown so high that it’s hard for the sector to keep reaching them.”
The tech firms known as the Magnificent Seven have taken a beating in recent weeks. Since the start of the year, these seven stocks have shed $1.57 trillion in market value, according to Yahoo Finance.
Shares in Meta, the parent company of Facebook and Instagram, have plunged nearly 19 percent over the past month. Amazon’s stock has tumbled almost 16 percent in the same period, while Nvidia is down about 14 percent.
The recent sell-off is a major reversal for the Magnificent Seven, which have added trillions of dollars in market value since late 2022, coming to represent more than a third of the S&P 500.
“It’s been the best performing factor by a mile over the past two years and typically when the stock market turns quickly, you see those leadership sectors tend to get hit the worst,” Cox told The Hill.
Read more in a full report at TheHill.com.
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Welcome to The Hill’s Technology newsletter, we're Miranda Nazzaro and Julia Shapero — tracking the latest moves from Capitol Hill to Silicon Valley.
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Keeping an eye out for "Middle Tech" in AI policy
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Internet Works, the association representing "Middle Tech" companies, is sharing its wishlist for the White House's request for information on their forthcoming AI Action Plan.
Internet Works represents various popular technology companies that don't quite fit the category of Big Tech, including Roblox, Discord, Pinterest and Yelp, among others.
Internet Works is hoping any AI policy the White House pursues keeps these "Middle Tech" companies in mind when crafting any new regulation, compliance and enforcement standards.
"As AI continues to evolve globally, ensuring that American businesses — particularly smaller enterprises and Middle Tech companies — can compete and scale is critical to maintaining U.S. leadership," Internet Works Executive Director Peter Chandler wrote in the association's submission, shared exclusively with The Hill.
Regulation should “be scaled to the size and operational capacity of all participants to prevent smaller enterprises and Middle Tech companies from being disproportionately impacted,” the proposal stated.
The regulation should be risk-based, Internet Works argued, giving stricter oversight only when there is an increased risk of harm to users.
Internet Works is also calling for clear compliance obligations to ensure these are proportionate to a company's influence and role in AI development.
Read more about other AI firms' wishlists for the White House in a full report Monday morning at TheHill.com.
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How policy will be impacting the tech sector now and in the future:
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Attorney General Pam Bondi warned Tesla vandals to “watch out” Friday, as the Trump administration seeks to crack down on those targeting Tesla dealerships and cars. Bondi said she has opened an investigation into the violent demonstrations taking aim at Elon Musk’s electric vehicle (EV) company. “They are targeting Tesla dealerships, the stations where you charge a Tesla, they’re vandalizing cars,” she told Fox Business …
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Tesla warned U.S. Trade Representative Jamieson Greer that the electric vehicle (EV) company and other American exporters are “inherently exposed” to retaliatory tariffs levied in response to ones from the Trump administration. “While Tesla recognizes and supports the importance of fair trade, the assessment undertaken by USTR [U.S. trade representative] of potential actions to rectify unfair trade should also take into account …
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Commerce Secretary Howard Lutnick on Friday said President Trump would like to hammer out a deal on TikTok’s future ownership under the current deadline, saying the president “doesn’t like to ask for extensions.” “So, it’s in Donald Trump’s hands. He is going to make the decision how he wants to play it,” Lutnick said in an interview on Fox Business Network’s “Mornings with …
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Crypto's week in review: Stablecoins dominate
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Stablecoins were the center of attention for crypto world in Washington this week, as the Senate made the first move on legislation:
Monday: Sen. Bill Hagerty (R-Tenn.) unveiled a new and improved version of his stablecoin bill, teeing up a vote at the Senate Banking Committee later in the week.
Sen. Kirsten Gillibrand (D-N.Y.), a co-sponsor of the GENIUS Act, touted improvements to "consumer protections, authorized stablecoin issuers, risk mitigation, state pathways, insolvency, transparency, and more."
Tuesday: The House Financial Services Committee got in on the stablecoin action, holding a hearing on "enacting a federal framework for payment stablecoins."
The lower chamber also voted Tuesday night to repeal an Internal Revenue Service (IRS) rule that would have extended certain reporting requirements to the crypto industry.
Thursday: The Senate Banking Committee advanced the GENIUS Act, with five Democrats joining all 13 Republicans on the panel to vote in favor of the stablecoin bill.
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Two key stories on The Hill right now:
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A group of 10 Democrats, including Senate Minority Leader Chuck Schumer (D-N.Y.), on Friday voted to advance a Republican-crafted bill to fund the … Read more
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President Trump on Friday visited the Justice Department (DOJ) for a remarkable victory lap eight weeks into his triumphant return to the White House. … Read more
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You're all caught up. See you next week!
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