Global AI-linked stocks tumbled on Monday after leaders of major artificial intelligence companies called for caution over the technology’s rapid development, raising fresh concerns about the huge spending that has fuelled the sector’s rally.
The selloff came as Anthropic CEO Dario Amodei urged AI companies to slow the pace of model development amid concerns about potential misuse, with OpenAI CEO Sam Altman and xAI chief Elon Musk expressing support for the warning.
Altman also said OpenAI would not proceed with an initial public offering this year, citing safety concerns.
The Nasdaq 100 fell 1.2% to a six-week low in early trading before paring losses, while the Philadelphia Semiconductor Index dropped 5.2%. Nvidia fell 3%, Advanced Micro Devices lost 4.5% and Micron declined 5.4%.
European technology stocks also came under pressure, with ASML falling 6%, while SoftBank plunged more than 10% in Asia. TSMC and SK Hynix also retreated.
Steve Sosnick, chief market analyst at Interactive Brokers, said a slowdown in AI spending could have wider implications for the economy and stock market.
“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,” he said.
Amodei warned over the weekend that AI agents could potentially take over the internet within six to 12 months, causing hundreds of billions of dollars in damage. Altman has separately warned that the risk of human extinction posed by AI was serious enough to require action from both companies and governments.
Gillian Hadfield, Bloomberg Distinguished Professor of AI Alignment and Governance at Johns Hopkins University, said the warnings should not be dismissed.
“The warnings should be taken seriously,” she said. “There are real risks of models doing things we don’t want them to do and which we don’t anticipate well.”
The concerns come as AI companies face growing scrutiny over cyberattacks, data centre construction and the potential misuse of AI systems. Anthropic recently reported that its Claude models had been used in activities including weapons development, cyber operations, surveillance and fraud.
Not everyone was convinced by the warnings. Michael Burry, known for his successful bet against the US housing market before the 2008 financial crisis, described the warnings as “hype and puffery” and suggested they could be covering broader concerns about slowing growth.
Despite the latest concerns, AI spending is expected to remain substantial. Morgan Stanley has forecast that AI spending could surpass US$1.3 trillion by 2027, while Deutsche Bank said the competitive race between companies and countries made it difficult to imagine firms voluntarily slowing down while rivals continued advancing.
Meanwhile, Anthropic itself is reportedly preparing for a public debut next month, with Nvidia in talks to become an anchor investor.
Reuters
