NEW YORK – AI-linked stocks plunged across the globe on Sept 14 after leaders of the biggest AI companies warned of risks from rapid development, the starkest threat yet to the billions of dollars being poured into the industry that have pushed world markets to record highs.
Anthropic CEO Dario Amodei, in a lengthy essay shared on X on Sept 12, called on AI companies to slow the rate at which they advance model capabilities amid mounting fears of misuse of artificial intelligence.
Both Elon Musk, who runs xAI, and Sam Altman, CEO of OpenAI, said they agree with Amodei.
Altman also said the company would not proceed with an IPO in 2026, citing safety concerns.
The CEOs’ comments deepened the scrutiny on AI-related sectors, triggered by companies increasingly relying on debt and circular financing to fund their AI ambitions, while also raising spending forecasts at a time when global yields, an indication of borrowing costs, have soared to multi-year highs.
“If the AI race slows materially, the key question becomes: Who pays for all that infrastructure? The leases, debt and power commitments remain even if expected compute demand and revenue growth slow. And that could bring credit risk increasingly into the AI story,” said Ipek Ozkardeskaya, a senior analyst at Swissquote.
Wall Street’s elite tech index, the Nasdaq 100, slid 1.7 per cent in early trading as chip stocks, which have led the AI sugar rush, fell the most.
“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,” said Steve Sosnick, chief market analyst at Interactive Brokers.
The Philadelphia chip index dropped 6%, with Nvidia down 3.5 per cent, Advanced Micro Devices off 5.6 per cent and Micron falling 6.7 per cent, while Musk’s SpaceX dropped 2.5 per cent. Hyperscalers such as Meta and Amazon.com dropped over 1.4 per cent each.
Semiconductor equipment makers Lam Research and Applied Materials tumbled 8 per cent and 7 per cent, respectively, while tech utilities Bloom Energy lost 8.9 per cent and GE Vernova declined 7.6 per cent.
European tech stocks tanked 2.3 per cent, weighed by chip equipment giant ASML’s 6.7 per cent fall, , alongside steep losses in Infineon and Siemens Energy.
Across Asia, ChatGPT-maker OpenAI’s investor SoftBank tumbled as much as 13.2 per cent, Taipei’s Taiwan Semiconductor Manufacturing Company slipped 1.2 per cent and South Korea’s SK Hynix slid 6.3 per cent.
‘Unacceptable’ risks
Amodei wrote that in six to 12 months, AI agents “could be capable of taking over the entire internet, potentially causing hundreds of billions of dollars in damage”.
San Francisco-based Anthropic released a threat intelligence report on Sept 10 detailing how several actors have used its Claude AI models for activities ranging from weapons development and cyber operations to surveillance and fraud.
Alarm about the potential harm from AI grew when Anthropic researcher Jacob Coxon resigned, stating that the “people building AI earnestly believe that it could kill us all by the end of the decade”.
OpenAI’s Altman said in an interview that risks of human extinction posed by AI were “unacceptable”.
And while several American lawmakers have raised concern about AI’s rapid progress and called for new rules, US President Donald Trump on Sept 13 likened AI critics to “very negative forces” bringing up scenarios that will not happen. He said he wanted to make sure that the US remains the industry leader.
AI-related trades have powered much of the gains in global equities since OpenAI released ChatGPT in 2022, but more recently cyberattacks by rogue AI agents and public discontent with data centre construction have raised opposition to the development of the industry.
The US and Chinese governments are expected to hold AI safety talks as part of bilateral discussions taking place in September, according to two people briefed on the plans.
But China’s state-backed Global Times blasted the Anthropic essay in an editorial, calling it a “Cold War playbook” intended to curb the country’s technological development.
Scepticism brews
Some investors dismissed the warnings from Anthropic and OpenAI.
Michael Burry, whose prescient bets against the US housing market before the 2008 financial crisis were chronicled in the movie The Big Short, said in a message on X the warnings were “hype and puffery” and “cover for real uncontrollable slowing growth”.
Others argued that record capital spending commitments suggest AI development is unlikely to slow, such as Morgan Stanley’s Brian Nowak who forecast AI spending will surpass US$1.2 trillion (S$1.5 trillion) by 2027.
“The key question is whether this is the first sign that the extraordinary AI investment cycle might eventually moderate. For now, that seems unlikely. The competitive race between companies and countries remains intense, and it’s difficult to imagine firms voluntarily stepping back while rivals continue to push ahead,” Deutsche Bank said in a note.
Almost echoing that stiff competition, Amodei’s Anthropic pushed ahead with its public debut, expected in October as sources told Reuters that the company is in talks to bring Nvidia as an anchor investor.
Still, the warnings are likely to remain an overhang.
“In the short term, these warnings could still weigh on AI and chip stocks,” said Charu Chanana, chief investment strategist at Saxo Bank in Singapore.
“Their valuations assume both strong demand and a relentless pace of technological progress,” she said. “When expectations are this high, even a possible delay can trigger profit-taking.” REUTERS
