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Super Micro Computer Shares (SMCI) are dumping on Wednesday as cracks in the AI trade emerge. Shares fell 28% after the company said it would raise $7 billion to fulfill massive demand for its AI servers. That’s $39 billion (!) worth of orders from 20 firms, the company said in a statement, which would very likely be the largest in its history.

To raise the money, the company plans to issue $5 billion in new common and preferred shares, as well as a $2 billion at-the-market offering in July or later against a market cap of about $17.6 billion. Existing shareholders clearly aren’t happy about dilution: SMCI shares fell 36% since Monday, and are down over 5% this year. And this comes after the company’s 2024 scandal when auditor Ernst & Young abruptly resigned and the company was nearly delisted from the Nasdaq.

SMCI’s tumultuous ride shows that AI demand is there, but the cash isn’t, as it and its competitors struggle to keep up with demand. To be fair, Super Micro isn’t the only AI firm raising cash. Google parent Alphabet recently raised $80 billion, upsized to $84.75 billion, to build out the infrastructure it needs to meet its hyperscale goals.

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Chip stocks sold off on Wednesday, as the whole market took a nosedive on President Trump’s Iran saber-rattling and oil prices spiked above $90, rippling through the economy. Micron stock fell about 4%, and AMD fell about 5%, continuing their slide from last week. The S&P 500 and Nasdaq Composite fell about 1.6% and 2% respectively.

And broadly speaking, the AI thesis will be tested as SpaceX (inclusive of xAI), Anthropic, and OpenAI go public over the next few months. If the market can absorb three of the most hyped names in tech at once, it's a green light for the AI trade. If it can't, expect a repricing across the board.