'Heading south!' Fox Business host sounds alarm as markets dip

Fox Business’ Stuart Varney sounded the alarm Friday as markets fell again, warning of mounting fears over sky-high valuations of artificial intelligence companies, which some critics have described as a “bubble” that could burst at any moment and rattle the U.S. economy.

“I want to check futures this Friday morning: where are we going? Heading south!” Varney said. “[Dow Jones Industrial Average] is off 150, NASDAQ [Composite] is down 150 points.”

The stock market slid for the second consecutive day Friday amid concerns over mass layoffs and AI, heading for what CNBC described as a “big weekly loss.”

Much of that concern is over AI companies spending billions of dollars towards research and development with no clear path to profitability, with OpenAI in particular raising alarm after recent comments from its CEO about the federal government being the “insurer of last resort,” hinting that taxpayers may be forced to bail AI companies out should they collapse financially.

“That drop on the NASDAQ, down 450 yesterday, down again today, that's got everybody worried about the air beginning to come out of the AI bubble,” Varney said.

However, Varney’s guest, portfolio manager Adam Johnson, tried to quell Varney’s fears.

“We are not in a bubble!” Johnson said. “To be perfectly clear, the S&P is trading at 23 times, NASDAQ trading at about 32 times. For context, in previous bubbles like in 2000 and 2009, those multiples went as high as 80 times Stuart, so we're nowhere near bubble territory.”

Nevertheless, global investors continue to fear for the worst. Goldman Sachs CEO David Solomon warned recently that he believed it was “likely” that markets may fall 10-20% sometime in the next two years. And Andrew Bailey, the governor for the Bank of England, warned that the dramatic investment in AI should make investors “very alert to these risks,” he told CNBC in its report Friday.