By Gregor Stuart Hunter and Johann M Cherian
Sept 14 (Reuters) - AI-linked stocks across the globe plunged on Monday 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 Saturday, 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 this year, 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, senior analyst at Swissquote.
Futures tracking Wall Street's Nasdaq e-mini futures fell 1.9%, with chip stocks, which have led the AI sugar rush, down the most.
Nvidia fell 3%, Advanced Micro Devices slid 5.7% and Musk's SpaceX dropped 2.6%. Hyperscalers such as Meta and Amazon.com dropped over 1.4% each.
European tech stocks tanked 2.5%, weighed by chip equipment giant ASML's 5.8% fall. Chip maker Infineon slid 8.4%, while AI equipment maker Siemens Energy lost 7.4%.
Across Asia, ChatGPT-maker OpenAI's investor SoftBank tumbled as much as 13.2%, Taipei's Taiwan Semiconductor Manufacturing Company slipped 1.2% and South Korea's SK Hynix slid 6.3%.
"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 Thursday detailing how several actors had 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 U.S. lawmakers have raised concern about AI's rapid progress and called for new rules, U.S. President Donald Trump on Sunday likened AI critics to "very negative forces" bringing up scenarios that will not happen, and said he wanted to make sure that the U.S. 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 U.S. and Chinese governments are expected to hold AI safety talks as part of bilateral discussions taking place this month, 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 U.S. 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 $1.2 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 next month 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."
(Reporting by Gregor Stuart Hunter in Singapore, Johann M Cherian and Purvi Agarwal in Bengaluru; Additional reporting by Rocky Swift; Editing by Muralikumar Anantharaman and Saumyadeb Chakrabarty)
