The AI industry's week from hell

A week of political upheaval , financial turmoil and salacious scandal delivered one final indignity to the AI industry Tuesday, as Anthropic's staggering IPO target fell short of expectations. Why it matters: The bubble is wobbling. Investors, businesses and governments need a spectacular success from Anthropic to stave off a crisis of confidence that could tear through the broader economy. Facing new political headwinds, the industry can scarcely afford another setback — much less the spectacle of AI's crown jewel losing its luster on Wall Street. Zoom in: Anthropic announced plans Tuesday to raise as much as $64.4 billion in one of the largest IPOs in history, targeting a valuation of up to $1.4 trillion. That's roughly $600 billion below what investors envisioned just months ago, as slowing revenue growth, soaring infrastructure costs and a punishing market selloff tempered expectations. Anthropic's annualized revenue reached $81 billion in October, but its long-term commitments to chips, data centers and computing infrastructure have also climbed to nearly $901 billion. Zoom out: Anthropic's valuation reset caps a punishing stretch of new challenges that began with last week's stunning midterm results: 🌊 A blue wave of AI-skeptical Democrats will arrive in Congress armed with subpoena power and an appetite for investigating the industry's safety failures and vast political influence. Voters delivered another blow at the local level, favoring restrictions on data-center development in 40 of 41 ballot measures nationwide. 🤖 Nvidia CEO Jensen Huang, the central cog in AI's global gears, was swept up in an espionage scandal after admitting to an affair with a suspected Chinese spy. His board, the FBI and Congress are investigating. Nvidia has shed more than $1 trillion in market value since the first New York Times revelations on Oct. 29, with shares plunging further Tuesday as the company faces a new shareholder lawsuit. 📉 Wall Street went into a tailspin as in