Fear of missing out is over. Investors now fear getting obliterated.
A leveraged sell-off, permitting uncertainty for data centers, and warnings of unsustainable valuations have flipped the AI trade from chasing the rally to avoiding the wreckage.
- Bloomberg Opinion columnist Shuli Ren says investor sentiment has shifted from FOMO, fear of missing out, to FOGO, fear of getting obliterated. m:…9726
- UBS estimates that 30% of planned data center projects in the United States could be delayed due to political and regulatory uncertainty. m:…9726
- Tech stocks suffered a $2.5 trillion sell-off on November 5, 2026. m:…9229
- Salesforce's John Somorjai says many current startup valuations are unsustainable and will lead to a market reckoning. m:…6922
- Ramtin Naimi says valuation goalposts for best-case startup outcomes have shifted from $100 billion in 2021 to $1 trillion today. m:…8755
From FOMO to FOGO
Bloomberg Opinion columnist Shuli Ren says investor sentiment has shifted from FOMO, fear of missing out, to FOGO, fear of getting obliterated. Her shorthand for the new mood is to get out before getting burned. The shift follows a historic rout in tech stocks: on November 5, 2026, the market saw a $2.5 trillion sell-off in tech shares. m:…9726 m:…9229
Ren points to two forces behind the unwind. Hedge funds and aggressive retail traders using leverage are the primary sellers, and the AI financing boom had been crowding out other sectors, pushing up borrowing costs for industries such as real estate and retail. At the same time, Democratic control of Congress is perceived by markets as a threat to the pace of AI data center construction, with UBS estimating that 30% of planned data center projects in the United States could be delayed by political and regulatory uncertainty. m:…9726
The numbers explain why a permitting slowdown travels so fast through the market. Building a data center with one gigawatt of computing power costs at least $40 billion to $50 billion, and if construction slows, demand for GPUs, CPUs, and memory chips falls with it. Ren's comparison is blunt: if data centers are not being built, developers do not need to buy the chips. Asian chip makers are described as high-beta trades whose revenue growth would disappear quickly if United States demand for AI chips declines. m:…9726
The other side of the ledger
The same week produced evidence that the wider economy was not collapsing with the trade. The United States economy added 165,000 jobs in October, well above the 59,000 economists had predicted. That contrast, a sharp market correction against a strong jobs report, is the tension investors are trying to price. m:…9229
Money is still flowing to companies with tangible traction. Zipline secured $1.5 billion in financing at a $21.5 billion valuation. m:…9229
Julius AI released Finance, a benchmark for evaluating frontier AI models on complex investment banking and private equity tasks. And in biotech, investor D.A. Wallach argued the bottleneck in drug discovery is not ideas but translation, turning ideas into proven safe and effective treatments through human clinical trials. The point for venture investors is that AI efficiency gains do not remove the slowest step in every sector. m:…9229
M&A as the defensive move
Salesforce's John Somorjai says many current startup valuations are unsustainable and will lead to a market reckoning. Salesforce has invested in more than 750 companies and acquired 29, and Somorjai says the company evaluates deals on strategic fit, technology and cultural alignment, and financial value accretion. m:…6922
Distribution is the core of the Salesforce case for buying rather than building. Plugging a startup into a 15,000-person sales force can rapidly scale a niche technology, and Slack's revenue has grown nearly threefold since Salesforce acquired the company in 2020. Security diligence is treated as a top-priority function: vulnerabilities found during penetration testing can kill a deal at the eleventh hour. m:…6922
The venture side tells a similar story from the opposite direction. Ramtin Naimi, founder of Abstract, says venture rounds and follow-on rounds are happening faster than ever, and mega-platform funds are deploying capital three times faster than they initially modeled. Investors who miss a round now pay a premium of three to five times to enter alongside the primary, the so-called cuck tranche, which Naimi describes as a structural necessity for capital-intensive AI companies rather than a sign of market health. m:…8755
The goalposts have moved with the scale. Naimi says best-case outcomes have shifted from $100 billion in 2021 to $1 trillion today, and rates the current market a 6.5 to 7 on a ten-point frothiness scale, against a 10 in 2021. He also counts 80 to 90 so-called neolabs that have raised between $1 billion and $5 billion. The picture is not a single crash or a single boom: it is a market where the fear has changed sides, from missing the rally to being caught holding the infrastructure when the building slows. m:…8755
What is still unresolved
- The extent to which Texas and other states will require additional permits for data center construction remains unclear.
- Whether NVIDIA's balance sheet support for infrastructure companies will drag down its own valuation is an open concern for investors.
- The exact timeline for Zipline's national expansion in California is unresolved.
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