Calls to Slow Down AI Development Send Asian Stocks Lower
Shares of major tech companies such as Samsung and SoftBank fell due to warnings from Sam Altman and calls to slow AI development, amid concerns over US interest rate hikes.
Translated by Qiyas from الجريدة — Original source
Shares in chipmakers SK Hynix and Samsung Electronics fell, while SoftBank Group dropped as much as 13% in Tokyo after OpenAI CEO Sam Altman said the company would not launch an initial public offering this year.
The dollar rose, while US Treasury bonds retained losses from last week’s sell-off, which pushed yields on the benchmark 10-year note closer to 5%.
This came after US inflation, which came in higher than expected, bolstered the case for raising interest rates. Traders in swap contracts now see a roughly 90% probability that the Federal Reserve will raise its key interest rate on Wednesday.
Investors are reassessing their bets on artificial intelligence to gauge whether weekend warnings could curb corporate spending and challenge earnings expectations across the supply chain.
This shift comes at the start of a pivotal week for markets, as the Fed’s meeting approaches, while rising oil prices are stoking inflation concerns and keeping borrowing costs high.
Tim Waterer, chief market analyst at KCM Trade, said: “Two unwelcome opposing forces are colliding.” He added: “Warnings that AI development needs to slow down, alongside another wave of oil price rises following the closure of Saudi Arabia’s East-West pipeline, create a difficult mix for high-risk assets.” He continued: “Seeing the 10-year Treasury yield on the verge of the 5% level is another worrying signal for stocks.”
For his part, Mark Cranfield, strategist at Bloomberg Markets, noted that the directional correlation between the KOSPI and US stocks has weakened since the Korean stock market’s decline in July.
He added: “But a new period of weakness will be hard for Nasdaq-listed companies to ignore, especially since the AI executives calling for a slowdown in technology development are from the US side.”
Anthropic PBC CEO Dario Amodei said on Saturday that the company would implement additional safeguards, including independent third-party assessments, and urged the broader industry to slow the development of its most advanced models.
