Asian stocks traded lower after a selloff in US semiconductor shares as concerns grew that the pace of artificial intelligence development may slow. MSCI's Asia Pacific equities gauge slipped 0.1%, with Japan's Topix falling 0.40% and South Korea's Kospi dropping 0.44%. However, Japan's Nikkei 225 bucked the trend, rising 0.21%, while Hang Seng futures gained 0.6%. The move followed a retreat on Wall Street where the Philadelphia Semiconductor Index tumbled 5.9% — its biggest drop in more than two months — with Nvidia Corp. and Intel Corp. among the decliners. Oil prices extended their rally with Brent advancing 0.7%, while the benchmark 10-year Treasury yield hovered around 5% in early Asian trading after briefly breaching that level Monday for the first time since 2023. Gold fell over 1% to about $4,300 an ounce, with a Bloomberg gauge of the dollar posting its biggest jump in more than two months.
The market decline was triggered by Anthropic CEO Dario Amodei's essay, 'We Must Pace the Frontier,' published over the weekend, in which he argued that the industry's ability to understand and control increasingly capable AI models is being outpaced by how quickly those models are improving. As reported by multiple sources, OpenAI CEO Sam Altman and Tesla's Elon Musk both publicly backed Amodei's call within hours — a notably unified moment for three executives who have spent much of the past year publicly sparring with each other. OpenAI chief scientist Jakub Pachocki went further, writing that no lab has yet solved alignment and monitoring well enough to keep scaling at maximum speed, calling for voluntary slowdowns to become industry standard. OpenAI CEO Sam Altman also said in an interview with Fortune published Saturday that his AI firm would not make its initial public stock offering this year as it focuses on safety, with both OpenAI and Anthropic expected to list publicly in the months ahead. Microsoft's AI researchers have also released a 15,000-word manifesto outlining guiding principles for the development of cutting-edge AI models, centering on the principle that "People matter more than AI." Anthropic PBC has picked Nasdaq as its listing venue ahead of a potential record-setting initial public offering, according to a person familiar with the matter, with the firm telling shareholders it will report an adjusted operating profit this quarter.
Among individual stocks, South Korea's memory chipmaker SK Hynix fell more than 6%, while Samsung Electronics dropped more than 4%. Japan's chip equipment manufacturer Tokyo Electron dropped 1%, and Japanese memory maker Kioxia Holdings also sank 6.4%. SoftBank Group plummeted 13.2%, with its OpenAI stake both a core investment and loan collateral, making it particularly vulnerable to safety concerns. OpenAI backer SoftBank Group Corp slid the most in nearly three months in Japan, as traders fretted that efforts to rein in cutting-edge AI could weigh on the boom driving hundreds of billions of dollars in capital spending. China-linked names MiniMax and Z.ai carried additional sensitivity, having recently gone public with their Hong Kong listings earlier this year marking the first time pure-play AI model companies traded on a global exchange. According to Morningstar's Dan Baker, "SoftBank's share price slide probably reflects the possibility that AI development may be slowed by regulators to try to avoid the worst case outcomes that Anthropic and Open AI have discussed." He added that "maybe also reflect the possibility that any further examples of loss of control of newer AI models could also slow AI development."
European AI and semiconductor stocks also came under significant pressure, with ASML falling more than 5%, Nokia dropping about 8%, and Infineon losing more than 7%. Companies linked to data centre expansion, such as Siemens Energy and Schneider Electric, also traded lower. US technology stocks also weakened in premarket trade, with Micron falling about 5%, Intel dropping nearly 6%, and Nvidia down almost 3%. Other semiconductor stocks also declined, while big cloud and AI-linked companies such as Microsoft, Amazon and Alphabet were slightly lower. The fall came as concerns over AI safety grew stronger last week, with Jacob Coxon, a researcher at Anthropic who previously worked at OpenAI, resigning, saying he was worried that Anthropic and OpenAI were "gambling with our lives." Anthropic safety researcher Evan Hubinger also said he believes there is more than a 10% chance that AI could "kill all humans" within the next decade, triggering a major debate on social media and drawing responses from AI industry leaders. Nasdaq e-mini futures fell 1.9%, with Nvidia falling 3%, Advanced Micro Devices dropping 5.7% and SpaceX falling 2.6%. Meta and Amazon declined more than 1.4% each. US President Donald Trump attacked Anthropic's chief for urging a slowdown in AI development, intensifying his opposition to new guardrails, blaming a "SICK conspiracy" for voter backlash against AI data centers and adding that "the only one that is happy about it is China."
The AI slowdown concerns extended beyond Japan, with South Korea's Kospi falling 3.3% to 6,684.37 dragged lower by chipmakers SK Hynix and Samsung Electronics, which both lost more than 4%. As reported by multiple sources, Taiwan's Taiex fell 0.7%, while Taiwan's leading AI chipmaker Taiwan Semiconductor Manufacturing Co. declined 1.2%. However, Hong Kong's Hang Seng rose 0.5% to 24,917.60, while the Shanghai Composite edged down less than 0.1% to 3,885.33. Chinese officials on Monday dismissed US tech leaders' calls to slow AI development on safety grounds as "fearmongering" and rejected claims that China's advances pose a global security threat. In other corners of the market, shares of Goldman Sachs Group Inc., Morgan Stanley and other banks fell in New York trading after Bank of America Corp. Chief Executive Officer Brian Moynihan said trading revenue will be "relatively flat" compared with last year's third quarter. The bond selloff reflected broader pressure on long-term borrowing costs across major developed markets, with a gauge of global government yields still at elevated levels. Widening fiscal deficits, heavy debt issuance and financing for AI investment are prompting investors to demand greater compensation for holding longer-dated debt. Brent crude topped $105 a barrel, raising concerns over inflation ahead of the Federal Reserve's policy decision, while the US 10-year Treasury yield hovered near 5%.
Analysts expressed concerns about the sustainability of the AI-led equity rally, which has been built on expectations of strong growth and productivity gains. Chris Armstrong, a strategist at Berenberg, said there's already quite a bit of nervousness in the market and if you've got some of the major players now saying: hang on, we need to slow down a little bit, that adds to uncertainty. He added that the shift could send AI stocks 10% to 15% lower. Zoe Gillespie, senior director at RBC Brewin Dolphin, told CNBC that if this growth story starts to derail, it could affect equity performance. She noted that much of the expected return from AI stocks is already built into future earnings growth, and if that comes under threat, markets could become unstable. Grace Peters, global head of investment strategy at JPMorgan Chase Private Bank, said: "If you saw bond yields move to the 5% or 5.25% level I think that's where you will see some indigestion from the equity market." She noted that "5% psychologically has an impact." Market breadth remained weak, with 539 of the 913 traded stocks declining, compared with 332 that advanced, while foreign investors were net sellers of shares worth ₹2,284.8 billion ($1.70 billion) in South Korea. Ipek Ozkardeskaya, senior analyst at Swissquote, said: "If the AI race slows materially, the key question becomes: who pays for all that infrastructure?" She noted that "the leases, debt and power commitments remain even if expected compute demand and revenue growth slow, and that could bring credit risk increasingly into the AI story."
