Recent market volatility has sharply influenced trader sentiment around an AI bubble burst, driven by a major selloff that erased trillions in value after Democratic midterm gains raised prospects of tighter data-center regulations and energy constraints. AI infrastructure spending by hyperscalers and chipmakers like Nvidia remains elevated, yet revenue growth at firms such as Anthropic has slowed markedly while valuations stay stretched relative to earnings. Ongoing large funding rounds, including OpenAI’s $11 billion raise at a $1.25 trillion valuation and Anthropic’s planned IPO, test investor appetite amid concerns over monetization of large language models and competitive pressure from lower-cost Chinese alternatives. Key near-term catalysts include earnings reports and regulatory signals that could either stabilize or accelerate the unwind.