It is currently described as the most important company in the world.

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

On Tuesday, shares of Nvidia fell 9.5%, slashing the company’s value by $278.9 billion, the biggest one-day loss ever for a U.S. stock.

A number of factors appear to have fueled the sell-off, which also led to losses in broader market indices such as 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 fuel a surge in investment by big tech companies that are using AI to drive new innovations — and profit.

On Wednesday, the stock price fell another 1.7%. The total market capitalization — the value of the company based on its shares — remains around $2.6 trillion.

“NVIDIA’s profit growth comes on the back of the huge investments in AI being made by the other big tech companies,” Dario Perkins, managing director at financial group TS Lombard, wrote in a commentary this week.

“This creates a circular dynamic that makes NVIDIA (and now the U.S. stock market in general) dependent on continued large AI investments.” If the five largest publicly traded companies, such as Amazon and Microsoft, stop investing in Nvidia, Perkins said, “we could be in trouble.”

Nvidia was once known for making graphics cards for computer games. But in a somewhat fortunate twist, these cards are now perfect for handling the processing power that AI needs to perform its tasks.

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

Nvidia is now so closely watched that a group of market observers met at a bar last month to watch the company report its quarterly results. Some later interpreted the event as a sell signal.

“Nvidia has changed the technology and the global landscape as its (graphics processing units) have become the new oil and the new gold in the IT landscape, with its chips powering the AI ​​revolution and being the only player 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 an AI payoff — essentially how quickly all the current investments flowing into it will eventually lead to well-defined use cases and greater profitability — contributed to the decline in Nvidia’s stock price.

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“I don’t think AI can compete with the internet,” Daron Acemoglu, an economist at the Massachusetts Institute of Technology, told the Financial Times this week in an interview, calling the technology “a pony with a few tricks.”

“AI has some great capabilities, but it doesn’t have the same scope yet to impact pretty much everything we do and create a lot of new things,” Acemoglu said. “It could, but when it does, we might call it a new technology, maybe that will take 10 years, and so on.”

The skepticism coincided with new economic warning signs. In the U.S., the labor market began to show unmistakable signs of weakness after the jobs boom that accompanied a broader economic recovery from the Covid pandemic. In China, housing woes began to weigh on consumption. Oil prices, which typically track global economic activity, fell to a three-year low.

Meanwhile, two new reports this week cast fresh doubt on when AI investments will pay off.

“Investors are debating whether future revenues for leading technology and cloud computing companies can justify billions of dollars in capital expenditures in artificial intelligence (AI),” wrote analysts at the BlackRock Investment Institute.

A similar warning was sounded in commentary from JP Morgan Asset Management, which said companies would need to shift the emphasis from “training” to “production” in a meaningful way to “realise sufficient returns on AI infrastructure”.

Matters were further complicated when Bloomberg News reported Tuesday that the Justice Department has opened an antitrust investigation into Nvidia, which is expected to maintain at least a 90% market share of AI chips over the next two years.

Another factor: Intel, once the dominant force in U.S. computer chips, has seen its stock fall 54% this year and is now at risk of being delisted from the Dow Jones Industrial Average, according to a Reuters report. While investors have punished Intel for failing to capitalize properly on the AI ​​boom, broader concerns about its earnings payouts likely contributed to the losses.

Steve Sosnick, chief strategist at financial group Interactive Brokers, told NBC News in an email that despite its rising share price, Nvidia is still one of the most volatile stocks on the market, meaning its price is subject to wide swings, both up and down.

“So investors who believe in the company will just have to get used to the swings,” Sosnick wrote. “Investors love volatility on the way up (also called ‘socially acceptable volatility’) but hate it on the way down. Unfortunately, one usually leads to the other.”

Tuesday’s sell-off is far from a death knell for Nvidia’s stock, which has more than doubled to around $109 by 2024. The tech-heavy Nasdaq index also remains up 16% year-over-year and is up nearly two-thirds since 2023.

Sosnick said the sale of Nvidia’s stock, which trades as NVDA, ultimately stems largely from investment managers’ desire to perpetuate the excessive price increases the company has already experienced this year.

“I believe that while individual investors are understandably still enamored with NVDA — hell, many of them have made a lot of money — I believe that institutional investors are taking a more sobering view, and are focused on capturing profits in the second half of the year, and that’s putting pressure on the stock,” Sosnick said. “They understand that no one ever went broke taking profits.”

This article was originally published on NBCNews.com