Investors are reassessing the value of companies driving the artificial intelligence revolution after several leading AI figures called for a slowdown in development for safety reasons.
Shares in AI-linked companies in Asia dropped when trading began today, dragging South Korea’s KOSPI index down by 3.7%. Chipmaker SK Hynix has slumped by 5.75%
SoftBank, a big AI invester, fell by as much as 13% in Tokyo after OpenAI’s chief executive officer, Sam Altman, said that the ChatGPT-maker won’t go public this year (SoftBank owns a stake in OpenAI). Taipei’s Taiwan Semiconductor Manufacturing Company dropped by 1.2%.
Traders’ optimism about AI has taken a hit after the CEO of Anthropic, Dario Amodei, appealed for the AI industry to “slow down” – a call which was quickly backed by both Altman and Elon Musk.
Amodei said “building [AI] too fast is reckless”, and warned that a swarm of AI agents could cause hundreds of billions of dollars of damage by “taking over the entire internet” in future.
Amodei’s pacing proposal has drawn heavy scepticism from critics and researchers who allege that AI firms are attempting to pre-empt more stringent government regulation and retain the status quo of power within the industry.
Although Amodie’s claims have been disputed by some, investors are pricing in a slowdown, which would make it harder for the industry to pay for its rapid rollout of datacentres.
Ipek Ozkardeskaya, senior analyst at Swissquote, says there is a “sour mood in the markets this morning”.
“So 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, particularly for highly leveraged datacentre operators and lenders exposed to projects built on aggressive assumptions about future AI demand, at a time when interest rates – hence borrowing costs – are expected to rise.
“What’s interesting is that the slowdown may come not because Big Tech is out of cash, or because investors won’t play along. It comes from the actual people who develop these models.”
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Today’s key events
• 11.30am BST: India’s inflation report for August
• 1.30pm BST: Canada’s inflation report for August
• 4.15pm BST: ECB president Christine Lagarde gives speech in Vienna, Austria
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