Key Takeaways
- AI-linked stocks fell sharply on Monday amid warnings from industry leaders.
- Elon Musk and Sam Altman, CEOs of xAI and OpenAI respectively, agreed to slow AI development.
- Tech indices like the Nasdaq 100 and chip stocks saw significant declines.
AI-linked stocks experienced a significant downturn on Monday, reflecting growing concerns over the rapid development of artificial intelligence (AI).
In a notable development, Anthropic CEO Dario Amodei called for a slowdown in the advancement of AI capabilities, citing mounting fears of misuse.
Both Elon Musk, CEO of xAI, and Sam Altman, CEO of OpenAI, echoed Amodei's concerns, with Altman stating that the company would not proceed with an IPO this year due to safety concerns.
The Nasdaq 100, a key tech index, dropped 1.7 per cent in early trading, with chip stocks, which have been leading the AI boom, experiencing the most significant decline.
Nvidia, Advanced Micro Devices, and Micron saw their stocks fall by 3.5 per cent, 5.6 per cent, and 6.7 per cent, respectively, while SpaceX dropped 2.5 per cent.
Semiconductor equipment makers Lam Research and Applied Materials also experienced a decline, with their stocks tumbling 8 per cent and 7 per cent, respectively.
Tech utilities like Bloom Energy and GE Vernova lost 8.9 per cent and 7.6 per cent, respectively, reflecting the broader market sentiment.
In Europe, the tech sector fell 2.3 per cent, with ASML, Infineon, and Siemens Energy suffering significant losses.
In Asia, SoftBank plunged as much as 13.2 per cent, while chipmakers TSMC and SK Hynix also retreated.
These developments come after a series of alarming events, including the resignation of an Anthropic researcher and the release of a threat intelligence report detailing the misuse of AI models.
President Donald Trump, however, dismissed concerns, likening AI critics to 'very negative forces' and emphasizing the need for the US to remain the industry leader.
If this does lead to sort of a slowdown and a rethink of AI spending, that will have ramifications for the economy and some important sectors of the stock market, because essentially, we’ve been running hot based on AI spending.
Steve Sosnick, Chief Market Analyst at Interactive Brokers
