A broad pullback in U.S. technology shares this week is exposing newfound fragility in the market’s artificial-intelligence trade. The tech-heavy Nasdaq Composite fell 1.4% on 19 August, while the S&P 500 information-technology sub-index is off about 2.5% for the week. The retreat follows comments from OpenAI chief executive Sam Altman, who said investors are “over-excited” about AI, and a Massachusetts Institute of Technology study that found 95% of companies earn no financial return from generative-AI projects. Some of the year’s highest-fliers led the reversal. Nvidia slid 3.5% on Tuesday, trimming—but not erasing—a roughly 30% year-to-date gain. Palantir dropped 9.4% that day and is down about 16% since mid-August, while Oracle, Advanced Micro Devices, Arm and other AI-linked names lost 5% or more. Analysts say crowded positioning and stretched valuations—tech’s forward price-to-earnings ratio recently touched 30—have left the sector vulnerable to bad news. The nervousness comes even as capital keeps pouring into the theme. JPMorgan Chase and Mitsubishi UFJ are arranging a loan of more than $22 billion for Vantage Data Centers, and Meta Platforms has lined up $29 billion in private credit to build a massive facility in Louisiana. UBS estimates private-credit funding for AI infrastructure is running near $50 billion a quarter, sparking comparisons with the over-built telecom boom of the early 2000s. Portfolio managers say the sell-off is also being magnified by seasonal caution and anticipation of Federal Reserve Chair Jerome Powell’s 22 August speech at Jackson Hole. With expectations high for a rate cut at the September meeting, even modestly hawkish guidance could deepen the rotation away from richly priced tech toward defensive and cyclical sectors.