AI slowdown warnings trigger sell-off in tech stocks
Shares of major AI-related companies fell after CEOs called for a slower pace of development, while broader market indices recovered later in the session.
U.S. equity markets slipped on Monday after leading artificial-intelligence executives urged a slowdown in the development of the technology. The Nasdaq 100 dropped as much as 1.8% early in trading, and the S&P 500 fell nearly 1%, before a rally in software and cybersecurity stocks lifted the broader Nasdaq Composite back toward positive territory by mid-afternoon.
Shares of AI-focused firms fell sharply: Nvidia slipped about 3%, Arm Holdings 8%, and peers such as ASML, Marvell and Intel each lost more than 4%. Applied Materials, Micron Technologies and CoreWeave also posted declines of over 4% to 6%. The Dow Jones Industrial Average was down roughly 100 points, with Caterpillar, a supplier for AI data-center construction, down 4%. The Philadelphia Semiconductor Index fell 5%.
The market reaction followed a Saturday post by Anthropic CEO Dario Amodei urging AI companies to “slow the pace at which we improve the capabilities of AI models,” citing risks such as loss of control, misuse for cyberattacks or bioterrorism, and economic disruption. OpenAI CEO Sam Altman echoed the sentiment, saying he agreed with Amodei, while Elon Musk added that “Dario is right.” Altman later clarified that the call was for pacing, not stopping, development.
"For markets, the key question is whether this is the first sign that the extraordinary AI investment cycle might eventually moderate," said Jim Reid, global head of macro research at Deutsche Bank.
"Oil and AI are back in focus," noted Max Kettner, chief multi-asset strategist at HSBC, adding that calls for a slower AI build-out were “overblown.”
The warnings also weighed on Asian markets, with South Korea’s Kospi falling more than 3% and SoftBank Group shares dropping 10.7% in Tokyo. European indices closed lower, led by AI-related stocks.
Separately, investors remain attentive to a possible Federal Reserve rate hike, as core inflation rose above expectations and Treasury yields climbed to their highest levels in over a decade.
President Donald Trump posted on social media that concerns about AI were a “hoax,” comparing them to investigations into his own conduct, and asserted that AI “will not be stopped” during his presidency.