Global technology stocks came under heavy selling pressure on Monday after some of the artificial intelligence industry’s most influential executives warned that the rapid development of increasingly powerful AI systems may need to slow. The comments rattled investors who have poured billions of dollars into semiconductor companies, data centres and other infrastructure supporting the AI boom.
The selloff followed a call from Anthropic chief executive Dario Amodei for AI companies to moderate the pace at which they develop more capable models. Amodei argued that slowing the rate of advancement could give companies and governments more time to introduce safeguards against potentially serious misuse and other risks. OpenAI chief executive Sam Altman and xAI founder Elon Musk subsequently expressed support for elements of Amodei’s position, giving the warning considerably more weight across the technology industry.
Investors responded by selling shares across the AI supply chain. The Nasdaq Composite declined as technology companies weighed on the broader US market, while the Philadelphia Semiconductor Index suffered particularly steep losses. Nvidia, AMD, Micron and other semiconductor companies fell as traders reconsidered expectations for the extraordinary levels of spending that have supported the sector’s growth.
The pressure quickly spread beyond Wall Street. In Japan, SoftBank shares plunged as much as 13.2%, while chipmaker Kioxia and semiconductor equipment company Tokyo Electron also declined sharply. South Korea’s SK Hynix and Samsung Electronics fell, while Taiwan Semiconductor Manufacturing Company also lost ground. European technology stocks were caught in the decline as investors reassessed the outlook for companies benefiting from the global expansion of AI infrastructure.
The market reaction highlights how deeply expectations surrounding AI have become embedded in technology valuations. Semiconductor manufacturers, data centre operators, utilities and equipment suppliers have attracted enormous investment on expectations that demand for computing power will continue expanding rapidly. Any coordinated effort by leading AI developers to slow the introduction of increasingly powerful models could challenge assumptions about how quickly that demand will grow.
The selloff also comes as technology companies face a more difficult financial environment. Rising borrowing costs and heavy capital requirements have increased scrutiny of the enormous sums being committed to AI infrastructure. US 10-year Treasury yields climbed to 5% on Monday, adding another source of pressure on highly valued technology stocks and increasing the cost of financing large-scale investment.
OpenAI added to the uncertainty after Altman said the company would not proceed with an initial public offering this year amid the growing focus on AI safety. The decision reinforced concerns that the industry’s largest developers could begin prioritising safety measures and longer development timelines over the breakneck expansion investors have come to expect.
However, the decline does not necessarily signal the end of the AI investment boom. Some investors argue that slower development of frontier models could give companies more time to commercialise existing technology and generate returns from the vast computing infrastructure already under construction. Demand for chips, electricity and data centre capacity could therefore remain strong even if the pace of model advancement becomes more controlled.
For markets, the larger question is whether the warnings represent a temporary moment of caution or the beginning of a structural change in the AI industry. Technology stocks have benefited enormously from expectations that artificial intelligence will transform the global economy. If the companies leading that transformation now decide that progress needs to be deliberately paced, investors may have to reconsider both the speed and scale of the growth they have already priced into the sector.
