Nassim Taleb, author of “The Black Swan,” warns of potential AI-driven tech sector bankruptcies and escalating volatility. Markets may be underpricing structural risks and overestimating the durability of current AI leaders, leading to potential drawdowns. The S&P 500 slipped amid mounting AI anxiety, with a narrow group of AI-linked stocks driving the equity rally.

AI fragility has broader implications beyond equities, as Bitcoin’s behavior mirrors tech stocks. Bitcoin’s correlation with software equities and tech ETFs signal a technology selloff. Amidst this, Bitcoin miners are pivoting to AI for sustainability and profitability, with some, like IREN Ltd, seeing significant stock gains.

Billionaire trader Arthur Hayes argues that Bitcoin’s divergence from the Nasdaq-100 may signal tightening liquidity and credit stress due to rapid AI adoption. A potential AI financial crisis could trigger bank failures, with Bitcoin’s slide reflecting early pricing of deflationary stress. Taleb is monitoring gold amid geopolitical tensions and dollar dominance uncertainties.

On Feb. 24, the Nasdaq 100 and Dow Jones closed higher despite volatility, while Bitcoin climbed 4.9% to $66,074.09. Taleb advises investors to prepare for potential bankruptcies and drawdowns as AI continues to impact markets. The broader impact of AI on the economy and financial stability remains a key concern for experts like Taleb and Hayes.

Read more at Yahoo Finance: ‘Black Swan’ author warns investors to brace for bankruptcies