On a brutal session in trading rooms in New York, the tech-heavy Nasdaq index followed up Thursday's 1.4 per cent slide with a drop of 2.86 per cent on Friday.

Analysts warned of 'tech carnage' with shares in US giant Intel nosediving and Amazon falling following bleak results on Thursday night.

Intel shares tumbled 29 per cent – wiping around £90billion off its value – while Amazon had at one point tumbled more than 3 per cent before regaining some ground to close down 1.4 per cent.

The latest sell-off came after Google owner Alphabet tumbled 13 per cent on – wiping close to £400billion off its value.

The tech titan, one of the so-called Magnificent Seven, is now down 30 per cent since its peak in May. The tech-heavy Nasdaq is has fallen almost 8 per cent in three weeks.

The sell-off matters to British investors and pension savers due to the huge sums invested in global tracker funds, which are dominated by US tech giants.

A host of US tech stocks, driven to record highs this year on a wave of AI mania, are now in so-called 'bear market' territory – meaning they are down more than 20 per cent from their peak. Some have halved in value.

The UK's FTSE 100 index has held up in the face of the sell-off – at least for now – as it benefits from a lack of exposure to tech and AI.

London's blue-chip index closed up 7.71 points to 10,729.78 on Friday despite the ructions on Wall Street.

But the tech slump is proving painful for millions of British investors who are exposed to the US stock market through their pensions and Isas.

A host of Britain's most popular investments, from technology funds and trusts and those that track major global indices, are packed full of US stocks now in reverse.

Neil Wilson, investor strategist at Saxo, warned of 'tech carnage as October wraps up' as investors fret over whether huge spending on AI infrastructure such as data centres will pay off.

He said: 'This is starting to look quite ugly. The selloff looks a bit indiscriminate and shows that investors don't just want capex, they want to see the returns already.'

The AI trade has run into turbulence recently as investors grew uneasy about the billions Big Tech has poured into scaling up AI infrastructure while awaiting evidence of stronger returns.

Several companies have tapped the bond market to finance those investments, amplifying concerns that debt-funded spending will become harder to justify as borrowing costs rise.