Technology stocks tumbled across global markets in a rough start to the week for investors after the heads of leading artificial intelligence companies called for the technology's development to be slowed amid fears over its threat to humanity.
The tech-dominated Nasdaq fell more than 1 per cent in early trading before clawing back some of its losses. The Philadelphia Semiconductor Index, which tracks a group of chipmakers, slumped by as much as 6 per cent.
Among the biggest losers were Arm Holdings, down 10 per cent, Nvidia, 3 per cent lower, Advanced Micro Devices, off 4 per cent, and Micron Technology, which fell 5 per cent.
AI Chiefs Sound the Alarm
The sell-off on Wall Street followed warnings from the heads of leading US AI companies, including Anthropic boss Dario Amodei, Sam Altman of OpenAI, and SpaceX and Tesla chief Elon Musk, who called for a more cautious pace of development amid mounting fears over the harm the technology can cause.
Amodei, whose company is behind the Claude tool, warned that a swarm of AI agents may be able to take over the internet within six months to a year unless firms devote more time to system safety protocols. He argued a slowdown would "greatly reduce the risk that something goes seriously wrong."
Altman and Musk agreed with Amodei's call for caution. Altman also said he would not proceed with plans to list ChatGPT owner OpenAI on the stock market this year because of safety concerns.
Asian Markets Hit Hard Overnight
The comments had already triggered heavy selling in Asia overnight. South Korea's Kospi index sank 3.3 per cent, with chipmakers SK Hynix and Samsung Electronics down 6.4 per cent and 4.1 per cent respectively.
In Tokyo, tech investment giant SoftBank plunged 10.7 per cent, dragging the Nikkei index down 0.8 per cent.
The prospect of higher interest rates and a surge in the price of oil above $109 a barrel also weighed on sentiment. Russ Mould, investment director at AJ Bell, said: "Oil and AI fears are causing a double headache for investors, with bond yields rising again and a loss of momentum on equity markets."
FTSE 100 Bucks the Trend
The FTSE 100 index fared better, rising 0.4 per cent, or 47.13 points, to 10,697.57, as oil majors BP and Shell made gains and investors shifting out of AI-related stocks looked to more traditional plays on the UK market.
Software and data stocks, which have been under pressure amid fears they will be among the biggest losers from the AI revolution, bounced back. Sage gained 5.3 per cent, RELX rose 5.2 per cent, and London Stock Exchange Group added 2.9 per cent.
Trump Accuses Critics of 'Sick Conspiracy'
Concern about AI has put industry chiefs directly at odds with President Donald Trump, who sees the technology as a key economic engine and wants the United States to remain the global leader ahead of China.
Trump claimed there was "a sick conspiracy" against AI in the US and said "the only one that is happy about it is China."
He said: "Whoever wins AI, wins. We are leading China, and all others, and will continue to do so. Conspiracy theorists, treasonists, traitors and leakers, beware."
Warning of Wider Economic Ramifications
Steve Sosnick, chief market analyst at Interactive Brokers, said: "If this 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."
Anthropic, OpenAI and Musk's companies SpaceX and Tesla are among the most closely watched names in the AI industry, and their leaders' comments on safety have become a key factor for investors weighing how quickly the technology's growth can continue.
