Nvidia and chip stocks slide as AI CEOs urge development slowdown

AI linked stocks fell sharply on Monday after Anthropic CEO Dario Amodei called on artificial intelligence companies to slow the pace at which they advance model capabilities, raising fresh concerns over the outlook for the industry.

OpenAI CEO Sam Altman and xAI CEO Elon Musk said they agreed with Amodei, bringing three of the most prominent AI executives behind calls for a more cautious approach to developing increasingly powerful models.

The comments weighed heavily on semiconductor stocks. Intel and AMD fell about 5%, while Marvell Technology dropped around 6%. The Philadelphia Semiconductor Index declined roughly 5%, putting it on track for its worst session since July.

Nvidia also declined as investors reassessed expectations for the massive spending on chips and infrastructure that has supported the AI investment boom.

The broader market moved lower alongside the selloff. At 11:40 a.m. ET, the S&P 500 was down 0.42%, the Nasdaq Composite had fallen 0.44% and the Dow Jones Industrial Average was down 0.23%.

Software companies moved in the opposite direction. ServiceNow gained about 7%, Workday rose 5% and Adobe climbed 4%, as investors reconsidered concerns that rapidly advancing AI could disrupt their businesses.

Meta and Alphabet also gained around 2% each.

Amodei called on AI companies over the weekend to deliberately moderate advances in model capabilities as concerns grow around safety and potential misuse.

The comments follow heightened scrutiny of the industry after Anthropic researcher Jacob Coxon resigned last week and warned about the potential risks posed by increasingly capable AI systems.

Markets are also facing pressure from rising interest rate expectations and higher oil prices. Traders are pricing in a nearly 90% probability that the Federal Reserve will raise rates this week, according to CME FedWatch.

Brent crude rose about 4% to $108.52 per barrel, while West Texas Intermediate gained more than 3% to $103.81.