Attention is turning to the impact on global financial markets after leading figures in the artificial intelligence industry called one after another for slowing the pace of technology development. Some observers say that if concerns about an AI investment slowdown spread, share prices of chipmakers and related stocks that have absorbed enormous sums of capital could take a short-term hit. Others argue the effect on long-term AI investment flows will be limited, given that demand for computing infrastructure remains solid.
Global tech investors are closely watching how the "slow down" argument from AI companies will ripple through earnings and share prices in related industries such as semiconductors and power, Bloomberg reported on the 12th, local time. The comments began with Anthropic CEO Dario Amodei and were followed by OpenAI CEO Sam Altman and xAI CEO Elon Musk, all of whom said the pace of development needs to be moderated.
In a post on his blog that day, Amodei argued that the pace of improvement in AI model capabilities should be slowed. "Progress will still feel fast, but we need to use the time we gain wisely," he said. Altman said on X that he agreed with Amodei, and in an interview with the business magazine Fortune he signaled that OpenAI would delay its initial public offering, which had been planned for this year, citing AI safety concerns. Musk also weighed in, saying Amodei was right.
Market participants see chipmakers and other related stocks taking an immediate hit in the short term if AI companies adopt a more cautious stance on developing advanced models. Wariness about the enormous cost of AI investment is already weighing on tech shares, and a slower pace of development could make it harder for corporate earnings to meet the market's high expectations.
Investor sentiment toward Asian tech stocks has already weakened considerably, as concerns grew this week that corporate profitability could deteriorate as the U.S. Federal Reserve's rate increase and higher borrowing costs feed through. "Tech valuations are built on an assumption of not only solid demand but also relentless improvement in AI models," said Charu Chanana, chief strategist at Saxo Markets in Singapore, adding that they will face tougher valuation scrutiny going forward.
Others counter that a slower pace of AI development could actually benefit the industry by giving companies time to earn returns on the infrastructure they have built. "The fact that three CEOs agreed on moderating the pace of development does not really change the money going into semiconductors and power infrastructure," said Billy Leung, an investment strategist at Global X. "If anything, it has the effect of lengthening the development period." He added that if AI adoption keeps expanding while the pace of new technological improvement eases somewhat, it could help the shift from a phase of spending on building infrastructure to one of generating returns from facilities already built.
The prevailing view is that the chances of long-term enthusiasm for AI investment breaking down are slim. "It could create short-term pressure on share prices, but it is unlikely to damage long-term AI investment flows," said Gary Tan, a portfolio manager at Allspring Global Investments. "AI is still at a relatively early stage of development."
