It’s been described as the most important company in the world at the moment.

But new concerns surrounding Nvidia, the chipmaker powering the artificial intelligence revolution — and which this summer became America’s second-largest public company, behind Apple, when its valuation surpassed $3 trillion — have prompted a fresh global market sell-off.  

On Tuesday, Nvidia shares dropped 9.5%, erasing $278.9 billion from the company’s value — the biggest such single-day loss ever for a U.S. stock.

A host of factors appear to have helped drive the sell-off, which also sparked losses in broader market indexes like the Nasdaq Composite and Dow Jones Industrial Average.

Nvidia’s stock has become a bellwether for the global economy as a whole, as it has helped drive a boom in investment from large tech companies that have looked to AI to drive new innovation — and profit.

On Wednesday, its share price declined another 1.7%. Its overall market capitalization — the value of the company based on its shares — remains around $2.6 trillion.

“The surge in NVIDIA’s earnings comes from the massive investment in AI being done by the other big tech companies,” Dario Perkins, managing director at TS Lombard financial group, wrote in a commentary this week. 

“This creates a circular dynamic that leaves NVIDIA (and now the US stock market in general) dependent on continued big AI investments.” If the five-largest publicly traded companies, like Amazon and Microsoft, stop investing in Nvidia, Perkins said, “we could have a problem.”

Nvidia was once known for making graphics cards for computer games. But in a somewhat fortuitous twist, these cards happen to be perfect for handling the computing load AI requires to perform its tasks. 

As a result, Microsoft and Facebook-parent Meta both now spend more than 40% of their budgets for hardware on Nvidia gear.

Nvidia is now so closely followed that a group of market watchers held a meetup at a bar last month to watch the company report its quarterly earnings — though some later viewed the event itself as a sell signal.

“Nvidia has changed the tech and global landscape as its [graphics processing units] have become the new oil and gold in the IT landscape, with its chips powering the AI revolution and being the only game in town for now,” Wedbush Securities analyst Dan Ives wrote in a recent note.

But growing fears of a broader economic slowdown, as well as renewed skepticism about the timetable for a payoff from AI — basically, how soon all the current investment flowing into it will ultimately lead to well-defined use cases and greater profitability — have helped drag Nvidia’s stock price down. 

“I don’t think AI will measure up to the internet in my opinion,” Daron Acemoglu, an economist with the Massachusetts Institute of Technology, said in an interview with the Financial Times this week, calling the technology “a few-trick pony.”

“AI has some great capabilities, but it does not have the same breadth of impacting pretty much everything we do and creating lots of new things yet,” Acemoglu said. “It might, but when it does, perhaps we’ll call that a new technology, perhaps that will be another 10 years, and so on.”

The skepticism has coincided with fresh economic warning signals. In the U.S., the labor market has begun to show unmistakable signs of weakness following the jobs boom that accompanied a broader economic recovery from the Covid pandemic. In China, problems in the housing sector have begun to weigh on consumption. Oil prices, which tend to track global economic activity, have fallen to their lowest levels in three years.

Meanwhile, a pair of new reports this week cast fresh doubt about when AI investments will pay off.   

“Investors are debating whether future revenues for top tech and cloud computing firms could justify billions of dollars of capital spending being poured into artificial intelligence (AI),” analysts with BlackRock Investment Institute wrote. 

A similar note of caution was sounded in commentary from JP Morgan Asset management, which said that companies would have to start to meaningfully shift emphasis from “training” to “production” for “adequate returns on AI infrastructure to materialize.”  

Complicating matters further was a report Tuesday from Bloomberg News that the Justice Department had begun looking into antitrust issues surrounding Nvidia, which is estimated to maintain at least 90% market share in AI chips for the next two years.

Another factor: Intel, once the dominant force in U.S. computer chips, has seen its share price decline 54% this year and, according to a Reuters report, is now in danger of being delisted from the Dow Jones Industrial Average. While investors have punished Intel for failing to adequately take advantage of the AI boom, it is likely that broader concerns about its payoff added to its losses.   

Steve Sosnick, chief strategist at Interactive Brokers financial group, told NBC News in an email that, even as it has powered higher, Nvidia remains one of the most volatile stocks on the market, meaning its price is subject to large changes, both higher and lower.

“So investors who believe in the company had better get used to the swings,” Sosnick wrote. “Investors love volatility on the way up (aka ‘socially acceptable volatility’) but hate it on the way down. Unfortunately, one usually brings the other.”

Tuesday’s sell-off is far from a death-blow for Nvidia’s stock price, which has more than doubled in 2024, to about $109. The tech-heavy Nasdaq index, too, remains 16% higher on the year, and since 2023 has climbed by nearly two-thirds.

Sosnick says much of the selling of Nvidia’s stock, which trades as NVDA, may ultimately have to do with investment managers making sure they cement the outsized price increase the company’s shares have already seen this year.

“I believe that while individual investors remain understandably enamored with NVDA — heck, many of them made a lot of money — I believe that institutional investors are taking a more sober view, focusing on locking in gains in the back half of the year, and that is pressuring the stock,” Sosnick said. “They understand that no one ever went broke taking a profit.”

In 2021, the National Football League signed an 11-year, $111 billion media rights deal. In July, the National Basketball Association signed an 11-year, $77 billion deal of its own.

What’s next? Well, not much all that soon.

While Ultimate Fighting Championship and Formula 1 have deals expiring in 2025, the vast majority of major college and professional sports have recently signed long-term media rights deals with U.S. TV networks and streamers.

Welcome to the sports media rights doldrums. Or, the calm before the storm.

The NFL can opt out of its current deal with all of its media partners — except Disney, which has a slightly different deal structure — after the 2028-29 season. By that time, driven by the pace of change among the largest media companies, the entire landscape could be significantly different than it is today, dramatically altering how much revenue leagues generate and who is paying.

“Anyone telling you with any degree of certainty the NFL is going to opt out or not is bananas,” said Daniel Cohen, executive vice president of global media rights consulting at Octagon. “There’s so much you can’t predict even two years out, never mind six.”

The NFL’s opt-out decision, while years away, is the next potential tectonic shift that will influence the balance of power in media. It’s possible the NFL could choose to end deals with longtime Sunday afternoon media providers such as Fox and Paramount Global’s CBS in favor of streamers, such as Apple, Amazon, Google’s YouTube or even Netflix.

It will also be a significant driver of future NFL team valuations. On Thursday, CNBC will reveal its Official 2024 NFL Team Valuations list, ranking all 32 professional franchises.

Given the current state of media, with Paramount Global agreeing to merge with Skydance Media by mid-2025, Warner Bros. Discovery actively looking for partners to build scale and share the cost of content, and Netflix jumping into live sports with its acquisition of Christmas Day NFL games, the potential bidders for games in four to five years could be dramatically different than today. That will determine how much of an increase the NFL may get on its next rights deal.

“There probably will be companies that don’t exist today that will merge to create new competitive bidders,” said former CBS Sports President Neal Pilson, who founded sports media consulting firm Pilson Communications. “Other deals, like the NBA, are a data point, but the NFL is its own marketplace. The programming is the honey. It’s all driven by the popularity of the NFL.”

Another determination of how much sports media rights deals will escalate in the future will be the state of the dwindling pay TV bundle. There have been 4 million pay TV customer losses this year to date, “a mindboggling total for just six months,” according to a recent MoffettNathanson report.

Live sports has long been the glue holding the bundle together, and a majority of viewership still comes from traditional TV versus streaming.

The economics of the bundle — still a cash cow for content providers like Disney and Comcast’s NBCUniversal — have driven rights increases for decades. Meanwhile, streaming has yet to turn a profit for most media companies.

Traditionally, the reach of broadcast networks, particularly in rural areas that still don’t have consistent high-speed internet, has caused the NFL to value Fox, Disney, NBCUniversal and CBS — all of which own broadcast networks. Most NFL games air on national broadcasters.

The NBA has also replaced its partnership with Warner Bros. Discovery, which doesn’t own a broadcast network, with NBCUniversal, which does.

But four years from now, it’s possible the ongoing shift to streaming, combined with Big Tech’s deeper pockets, will convince the NFL to view broadcasting as anachronistic rather than essential.

On the other hand, if streamers become the sole distributors of sports, they’ll have all the market power, which could stifle valuations.

“If you put all your eggs in the streaming parties’ baskets, and if legacy media is hobbled to the point they can’t pay for media rights anymore, then you’re giving streamers a lot of market power,” said Shirin Malkani, co-chair of the sports industry group at Perkins Coie.

Bank of America recently put together a chart of recent media rights deals and their estimated values. Some of the numbers are slightly different than reported figures.

The National Hockey League’s deal with its media partners lasts through the 2027-28 season.

Major League Baseball’s deal is up in 2028 — and will likely be shaped more by the expiration of the players’ collective bargaining agreement in 2026 than the state of the media industry. Still, the vastly changing regional sports business, on top of the traditional TV landscape, could make MLB a litmus test for the rights deals that follow.

The PGA Tour’s media deal runs through 2030. NBCUniversal owns the Winter Olympics until 2030 and the Summer Olympics until 2032. NASCAR signed a contract late last year with media carriers until 2031. ESPN locked up the College Football Playoffs until 2031. Apple inked a deal for Major League Soccer until 2032.

The long-term nature of these deals has given the current media ecosystem some certainty. That’s a benefit for the leagues, media companies and pay TV providers, who all rely on the consistency of cash flow.

“My advice to clients is that if you’re in a deal that feels fair right now, or that is analytically fair to good, don’t go searching for something great,” said Octagon’s Cohen, who represents several professional sports leagues in their media deals. “Things will keep evolving over the next six years, so it’s best to hold onto a good deal.”

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

There is a $2 billion gulf growing in Los Angeles.

The National Football League’s Los Angeles Rams, No. 2 on CNBC’s Official 2024 NFL Team Valuations list, are worth $8 billion, while the Los Angeles Chargers rank 26th at a value of $5.83 billion.

While the Rams have a recent Super Bowl to their name and the Chargers don’t, the gap in value is about much more than team performance. It comes down to stadium economics.

Both teams play in SoFi Stadium, which Rams owner Stanley Kroenke financed to the tune of more than $5 billion. Kroenke owns and operates the stadium. The Chargers, owned by the Spanos family, are just tenants.

The Rams get about 85% of the stadium’s revenue from luxury suites and sponsorships, as well as all the revenue from non-NFL events, according to a person familiar with the matter. That leaves about 15% of suite and sponsorship revenue for the Chargers — and no money from non-NFL events.

That means, for example, when pop star Taylor Swift sold out six nights at SoFi Stadium in August 2023 during her Eras Tour, the Chargers got no piece of the pie.

The mega tour was a boon for several NFL teams last year. A person familiar with the matter told CNBC that a particular stop on the Eras Tour netted $4 million in revenue per show for the hosting stadium.

Stadium economics count a lot in the pecking order of NFL valuations because $13.68 billion, or 67%, of the league’s $20.47 billion in revenue was shared equally among the 32 teams in 2023. The vast majority of that $13.68 billion comes from national media rights plus sponsorship and licensing deals. But teams do not share revenue from stadium suites, hospitality and sponsorships — and that is where some franchises can pull away in value.

On top of the six Swift concerts, SoFi Stadium also hosted performances last year by Beyoncé, Ed Sheeran, Metallica and Pink. The Rams would keep 100% of that revenue.

The franchise also gets to keep the full $625 million of SoFi’s stadium naming rights, which last 20 years through the 2039 season.

It is a unique revenue share structure in the NFL. The only other franchises to share a stadium, the New York Giants and the New York Jets, split stadium revenue down the middle, according to CNBC sources, and are just about $500 million apart in overall franchise value, according to CNBC’s 2024 list. That is a significantly smaller margin than the LA teams.

Last year, the Rams were second in the NFL in sponsorship revenue, behind only the Dallas Cowboys, who are No. 1 in overall value on CNBC’s 2024 list and are fast approaching $250 million in sponsorship revenue, according to a person familiar with the team’s finances.

The Rams’ sponsorship revenue came in under $200 million last year, according to a person familiar with that team.

Of course, building your own stadium does not come without risk. SoFi Stadium cost more than $5 billion — the most of any stadium in the world — and the Rams have $3.5 billion of debt, by far the most in the NFL.

But the risk appears to have paid off.

When Kroenke bought the Rams for $750 million in 2010, the team was in St. Louis. He moved the franchise to Los Angeles for the 2016 season at a huge expense: Kroenke had to pay the league a relocation fee of $550 million and an additional $571 million settlement fee related to a lawsuit the city of St. Louis filed over the decision to bolt to California.

Still, including that combined $1.12 billion in fees, Kroenke’s investment in the Rams is up more than four-fold since he took control of the franchise. Since moving to Los Angeles, the Rams have made the playoffs five times and have been to the Super Bowl twice, capturing the Lombardi Trophy in 2021.

The Chargers, who moved to Los Angeles in 2017, have made it to the playoffs just twice since and have never advanced beyond the divisional round.

The Spanos family hasn’t done too badly, though. The late Alex Spanos purchased the then-San Diego Chargers in 1984 for $72 million. Similar to the Rams, the Chargers had to pay a $550 million relocation fee. Including the fee, the value of the team has increased 81-fold since August 1984. Over the same span, the S&P 500 is up 53-fold.

In stock market parlance, think of the Rams as a growth stock and the Chargers as a dividend play.

A bankruptcy court approved Red Lobster’s plan to exit Chapter 11, putting the seafood chain one step closer to exiting bankruptcy.

The company, known for its seafood offerings and cheddar biscuits, filed for bankruptcy protection in May. Red Lobster had struggled with increased competition, expensive leases, last year’s disastrous shrimp promotion and a broader pullback in consumer spending.

As part of the restructuring plan, a group of investors under the name RL Investor Holdings will acquire Red Lobster by the end of the month. Once the acquisition closes, former P.F. Chang’s CEO Damola Adamolekun will step in to lead Red Lobster. Current CEO Jonathan Tibus, who led the company through bankruptcy, will leave Red Lobster.

“This is a great day for Red Lobster,” Adamolekun said in a statement. “With our new backers, we have a comprehensive and long-term investment plan — including a commitment of more than $60 million in new funding — that will help to reinvigorate the iconic brand while keeping the best of its history.”

RL Investor Holdings includes TCW Private Credit, Blue Torch and funds managed by affiliates of Fortress Investment Group. Red Lobster will operate as an independent company.

After slimming down its restaurant portfolio, the chain currently operates 544 restaurants across the U.S. and Canada.

At least nine other restaurant chains have filed for bankruptcy this year. High interest rates and a pullback in consumer spending have weighed on eateries, particularly if they were already struggling to bounce back from the pandemic.