AI stock slump rattles markets; UC Merced keeps projects on track

Key Takeaways

AI-focused tech stocks led a broad selloff Thursday after fresh spending signals from major firms.
Meta told investors it would create a new stock class to raise cash for AI investments.
UC Merced’s AI Advisory Council, chaired by Avi Badwal, says campus integration work continues.
Valley savers feel swings through index funds in 401(k)s and public pensions.

Three red days in a row will get anyone’s attention. UC Merced’s AI leaders had a different message Friday: keep the work moving.

The selloff, carried in the Merced Sun-Star’s business section, centered on AI‑tied names after fresh guidance on capital spending and financing. That matters here because retirement accounts in Merced County track broad indexes, so when the biggest tech names slide, local balances do too.

UC Merced’s AI Advisory Council, chaired by Assistant Vice Chancellor for Enterprise Technologies Avi Badwal, has been mapping where AI fits across teaching, research and administration. The council’s plan is campus‑level and long‑horizon, not day‑to‑day tied to a stock chart.

What moved the market

Wire reports pointed to aggressive AI build‑outs and higher capital needs, including Meta’s move to create a new class of stock to raise money. Investors who’ve rewarded AI spending most of the year stepped back and re‑priced the tab. Oil prices and rate worries didn’t help.

The turn hit large platform companies and chip suppliers first, then bled into the rest of tech. If you own an S&P 500 index fund in a county 401(k), you felt it. A lot of Valley households do.

Why this matters in Merced

Local exposure is indirect but real. County workers and school employees contribute to retirement systems with broad equity exposure, and many private‑sector workers stash paychecks into target‑date funds. Swings in mega‑cap tech move those benchmarks.

On the ground, UC Merced’s AI effort is about people and practices. The council’s public brief lays out workgroups for teaching and learning, research and administration, with deliverables that include pilot grants and guidance on responsible use. The goal, they’ve said, is to build guardrails around how the campus uses AI tools while investing in skills that last longer than a quarter.

That means classes still run, pilot projects still get scored, and staff training still gets scheduled. A market downdraft does not cancel an R1 university’s governance work.

The open questions

Two threads will bear watching. First, whether continued cost disclosures from Big Tech cool investor appetite for the AI story through year‑end. Second, whether higher financing costs slow private data‑center timelines in places like the Central Valley, where power and water are already tight and permitting takes time.

UC Merced’s council intends to report out on pilot projects and next steps this fall. MercedCERA’s next public investment update will show how much of this volatility stuck. No one’s giving a timeline for that today.

A single yellow legal pad sat curled on the corner of a front‑office desk.

Central Valley AI is produced by the CVAI Newsdesk team and developed by Kaweah Tech, a regional firm that builds, deploys, and integrates AI solutions for businesses across California's Central Valley.

Source

https://www.mercedsunstar.com/news/business/article317733750.html