From Kiplinger · · 2m
AI Safety Warnings Knock Stocks Off Course
Three top AI CEOs asked the industry to slow down, and Wall Street took the hint out on chipmakers.
In brief
Three top AI CEOs asked the industry to slow down, and Wall Street took the hint out on chipmakers. When the people building AI start asking for brakes, the money rotates from the builders to the companies that clean up the mess. Originally reported by Kiplinger.
Stocks slip on two fears
Monday brought a double hit: worry that AI is moving too fast, and oil prices that keep climbing ahead of the Fed meeting. Crude is up nearly 20% this month.
Amodei publishes a warning
Anthropic CEO Dario Amodei used a weekend essay to argue AI is advancing without guardrails, pointing at models that improve themselves and run cyberattacks unprompted.
“We must slow the pace at which we improve the capabilities of AI models.”
Altman and Musk agree
Sam Altman of OpenAI and Elon Musk of xAI, now owned by SpaceX, both backed the call to slow down. SpaceX shares fell 2.0%.
Trump waves it off
The president posted on Truth Social that the only control AI needs is a strong, smart president. Investors listened to the CEOs instead.
“only control … AI needs is a STRONG AND SMART (High IQ) PRESIDENT”
Chipmakers take the hit
Intel dropped 5.6% and Nvidia fell 3.4% as the safety warnings landed on anything tied to AI buildout.
Cybersecurity stocks cash in
The same fear that sank chips lifted defense names. CrowdStrike closed up 13.9% and Palo Alto Networks gained 13.1%.
Oil jumps on a pipeline
Saudi Arabia shut a key line that bypasses the Strait of Hormuz after Iraqi drones damaged it. WTI crude rose 1.3% to $101.39 a barrel.
A rate hike looks locked in
The 10-year Treasury yield touched 5% for the first time since 2023. Futures traders now price a 93% chance of a quarter-point hike Wednesday, up from 59% a week ago.
Bank of America warns
CEO Brian Moynihan said Q3 investment banking fees will fall more than 10% and trading revenue will be flat. The stock slid 5.1% after a blowout second quarter.
“We're not as well positioned in some of the businesses that … had more activity.”
GE Aerospace gets downgraded
Melius analyst Scott Mikus cut GE to Hold, warning that rising aircraft retirements will bite the parts business. It is a rare call on a stock 19 of 22 analysts rate a Buy.
“Great times don't last forever.”
What it means
When the people building AI start asking for brakes, the money rotates from the builders to the companies that clean up the mess.
