US stocks fall as AI slowdown worries hit chipmakers

Reports coming in for today mention that A selloff in chipmakers dragged down stocks after leaders of artificial-intelligence giants proposed slowing the technology’s development, with a surge in oil additionally weighing on sentiment.

From the US to Europe and Asia, semiconductor shares came under heavy pressure. American powerhouses Nvidia Corp. and Broadcom Inc. slumped. A closely watched industry gauge sank 5%. The Nasdaq 100 declined 1.3%. Brent crude topped $108, raising concern around inflationary pressures in the countdown to the current week’s The US central bank decision. Short-term Treasury yields rose.

A 3,800-word missive by Anthropic PBC Chief Executive Officer Dario Amodei — which was endorsed by OpenAI CEO Sam Altman and SpaceXAI CEO Elon Musk — stated development of the most-advanced systems must be slowed in order to prevent AI slipping beyond human control and inflicting catastrophic harm.

On Monday, Microsoft Corp.’s AI researchers have released a new set of guiding tenets that they say boil down to five words: People matter more than AI.

If the latest developments propel out the timing of promised AI returns, it makes sense that market participants would become less enthusiastic, according to Matt Maley at Miller Tabak.

While US industry leaders are not advocating a full pause, the latest commentary suggests that safety considerations could, and should, slow the pace of frontier AI development, according to Justin Post and Nitin Bansal at Bank of America Corp.

“We believe concerns on AI deployment could be a sentiment negative for the AI value chain,” they wrote. “Despite potential concerns, we keep believe AI capacity will have firm multi-year demand.”

At HSBC, Max Kettner says calls for a slower AI buildout and resulting fears for the tech sector are “overblown.” This could actually help profitability of AI firms eventually, he stated.

“Fearmongering, confrontation and vicious competitive pressure will only disrupt the process of global AI governance and serve the interests of no one,” Chinese Foreign Ministry spokesman Guo Jiakun stated at a regular briefing in Beijing on Monday.

Traders additionally kept a close eye on the latest geopolitical developments. A meeting between Iran and several Gulf Arab nations over a temporary shipping lane through the Strait of Hormuz was postponed, highlighting tensions with the Islamic Republic.