Tech Stocks Sink Worldwide as Analysts Debate AI Slowdown Impact
Global Market Reaction and Analyst Perspectives on AI Development
Sept 14 (Reuters) - Anthropic CEO Dario Amodei called on AI companies to slow the pace at which they develop the technology, the latest in a series of warnings highlighting growing concerns across the tech industry over the safety of AI.
Stocks from Asia to New York sank on the news, with tech-heavy equity markets including South Korea's KOSPI closing down 3.3% and the U.S. Nasdaq index falling 0.8%. In the U.S., chip stocks bore the brunt of the selloff while software names rallied sharply.
Analyst Reactions to AI Slowdown Concerns
Here are comments from analysts:
STEVE SOSNICK, CHIEF MARKET ANALYST, INTERACTIVE BROKERS, GREENWICH, CONNECTICUT
Market Sentiment and Economic Ramifications
"If people really thought that AI spending was going to come grinding to a halt, you would see stock futures much lower. You might see bond yields a bit lower than they are this morning as well."
"If this is true and 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."
"It's fair to ask whether this is actually occurring or not. It may buy them some time politically as well. You're seeing the spenders up. So Alphabet's up, Meta's up and Microsoft's up despite all this. Some other companies that are very reliant on that spending are down. You're seeing chips down, but I don't think anybody really thinks that this is slamming on the brakes."
NIC PUCKRIN, CROSS-ASSET ANALYST AND FOUNDER OF COIN BUREAU, DUBAI
Humanity vs. AI Bull Market
"What's good for humanity may not be good for the AI bull market. That's the message markets are getting loud and clear this morning, after Anthropic CEO Dario Amodei called for a slowdown in AI development over the weekend."
"The interesting thing here is that it's not the frontier labs that are most affected. They may have to slow spending and postpone their IPOs, but they will still thrive. Everyone whose business is dependent on that spending going up exponentially may not be so lucky."
"The AI trade may not end with a dotcom-style crash. It may simply be a gradual slowing down of the AI arms race that's good for humanity, but bad for short-term valuations."
PETER ANDERSEN, FOUNDER OF ANDERSEN CAPITAL MANAGEMENT, BOSTON
Market Overreaction and Long-Term Outlook
"It's a knee-jerk reaction and I can't see that there is any data to back it up. We are far, far away from AI taking over the world."
"I do not think there will be a slowdown. It's ridiculous to think that a handful of 30-year-olds that have at most 10 years of experience are going to slow down any of this technology."
"If you're highly levered, as the stock decreases, what I would think is temporarily, their balance sheets could be under pressure and they might have to delever and potentially trim some of these stocks. But for the rest of us, it is a rare buying opportunity triggered by paranoid delusion."
JAMIE COX, MANAGING PARTNER FOR HARRIS FINANCIAL GROUP, RICHMOND, VIRGINIA
AI Infrastructure and Technology Cycles
"It should come as no surprise to people that we're approaching the top of the S-curve in AI infrastructure. This happens in every technology cycle. You have a period of time when infrastructure gets built and people think there's unlimited demand, so supply gets ahead of demand. At some point, supply starts to tail off even as demand is growing."
MATTHEW TUTTLE, CEO OF TUTTLE CAPITAL MANAGEMENT, CONNECTICUT
Regulation and Market Adaptation
"Three rivals now agree that the fastest engine in technology needs a governor. The market still has to learn how hard that governor will press. A governor is not an emergency brake (but) it stops an engine from running so fast that it tears itself apart."
"The pacing trade is not about whether compute demand vanishes. It is about which demand survives a slower clock."
DAVID MORRISON, SENIOR MARKET ANALYST, TRADE NATION, UK
Potential Slowdown for Chip Makers
"It could potentially be that the next quarter we do see some kind of slowdown across Nvidia and other chip makers and hyperscalers are going to pull back on their spending and maybe these CEOs are preparing for that. They're doing some of the groundwork, and this is a good opportunity to do so. But unfortunately, this is just supposition at the moment."
DENNIS DICK, FOUNDER AND MARKET STRUCTURE ANALYST AT TRIPLE D TRADING, ONTARIO
Sector Rotation: Hardware vs. Software
"This is probably a hiccup more for the AI stocks as opposed to an eye-opener here. If AI starts to slow down and they put speed bumps in place, that's going to be good for the software names. We're seeing a clear sell-off in hardware names and a clear buy in some of the software names. Violent, violent rotation here this morning."
(Reporting by Bengaluru markets team; Compiled by Sruthi Shankar in Bengaluru; Editing by Devika Syamnath)
