The artificial intelligence (AI) market has been the focus of much attention in recent years, with companies racing to establish their dominance in the field. However, recent reports suggest that the hype surrounding AI may be starting to cool down.

According to a report by Goldman Sachs, the proportion of S&P 500 companies mentioning "AI" during their quarterly earnings calls declined in the third quarter of 2023. The report also noted that Google search volumes for AI, which had previously risen sharply, appear to have stabilized in recent weeks.

This moderation in AI enthusiasm among companies and investors could pose a risk for tech giants like Microsoft and Alphabet, which have made significant investments in the AI space. These companies have benefited from the emergence of ChatGPT and AI technology in general, but a slowdown in the hype could impact their future growth prospects.

The report also highlights the high ownership level of mega-cap tech stocks by hedge funds, which represents another risk. With the potential for further waning enthusiasm for AI, hedge funds may want to book profits, leading to a sell-off in these stocks.

However, despite the slowdown in AI mentions in earnings calls, analysts still see potential for AI to generate more business for tech companies. Wedbush analyst Dan Ives believes there is plenty of runway ahead for the new technology.

While the future of the AI market remains uncertain, it is clear that companies in this space will continue to face intense competition as they strive to prove themselves in the race for AI dominance.