Tech Stocks Tumble as AI Leaders Urge Caution Over Rapid Development

Global technology stocks fell sharply on Monday as investors reacted to growing calls from artificial intelligence industry leaders for a slower pace of AI development, raising fresh concerns about the huge spending that has powered the sector’s recent rally.

The sell-off spread across major markets, with semiconductor companies bearing much of the pressure. South Korea’s tech-heavy KOSPI fell 3.3%, while the Nasdaq Composite in the United States declined 0.6% to close at 26,186.41.

The latest market concerns followed comments from Anthropic chief executive Dario Amodei, who called for caution over the rapid development of AI because of safety concerns. His comments were followed by similar warnings from other prominent technology figures, including OpenAI chief executive Sam Altman and Elon Musk.

Investors interpreted the calls as a potential threat to the enormous spending on AI chips, data centres and other infrastructure that has driven some technology stocks to record valuations.

Nvidia, one of the biggest beneficiaries of the AI boom, fell 3.4% on Monday. Memory-chip maker Micron Technology dropped 5.3%, while other semiconductor companies including Marvell Technology and AMD also came under pressure.

The decline was not limited to the United States. AI-related companies and semiconductor stocks across Asia and Europe also suffered losses as investors reassessed whether the pace of AI investment can continue at its current level.

Analysts, however, cautioned against interpreting the sell-off as evidence that AI investment is coming to an end.

Some argued that the market reaction may be an overreaction to comments about slowing the pace of AI development rather than an indication that companies intend to abandon their investment programmes. Others said a moderation in infrastructure spending could nevertheless have significant consequences for chipmakers and companies supplying data centres.

The market was also under pressure from broader economic concerns. The U.S. 10-year Treasury yield briefly moved above 5% for the first time since 2023, while oil prices remained elevated, adding to investor worries about inflation and borrowing costs ahead of the Federal Reserve’s meeting this week.

Despite Monday’s decline, major U.S. stock indexes remain substantially higher for the year, underscoring the extent to which investors continue to bet on technology and artificial intelligence as major drivers of economic growth.

The latest sell-off nevertheless highlights growing uncertainty over whether the extraordinary pace of AI spending can be sustained, and whether the companies that have benefited most from the boom can continue to justify their lofty valuations.