AI-linked Asian stocks slump after top lab CEOs warning

Asian stocks suffered a sharp decline after top AI lab CEOs issued warnings about the rapid pace of AI development, citing concerns about potential threats to humanity. Anthropic CEO Dario Amodei called for AI companies to slow their model advancements, a sentiment echoed by Elon Musk of xAI and OpenAI CEO Sam Altman. Altman later revealed that OpenAI would postpone its IPO this year due to safety concerns.

Shares in OpenAI investor SoftBank plummeted by up to 13.2% in Japanese trading, alongside significant drops in memory chipmaker Kioxia (9.8%) and Tokyo Electron (3.7%). In other markets, Taiwan Semiconductor Manufacturing Company (1.2%), SK Hynix (5.3%), and Samsung Electronics (3.7%) also experienced declines. The selling pressure is expected to impact AI and semiconductor-related stocks in Tokyo, with Takayuki Miyajima, a senior economist, predicting further negative sentiment.

Uncertainty over the Middle East crisis further dampened investor confidence. In Shanghai, memory chipmaker CXMT fell 2.7%, while Semiconductor Manufacturing International Corporation dropped 1.4%. Hong Kong saw Zhongji Innolight decline by 4.1%, and Minimax slipped 5.4%. The backlash against AI extended to Z.ai, whose shares dropped up to 10.5% following a discounted share placement.

Anthropic disclosed a threat intelligence report revealing how various entities had exploited its Claude AI models for military, cyber, surveillance, and fraudulent activities. Concerns about AI's potential harm intensified when researcher Jacob Coxon resigned, stating that AI could possibly lead to human extinction by the end of the decade.

OpenAI CEO Altman emphasized the unacceptable risks of human extinction posed by AI. While US lawmakers have expressed concern and called for new regulations, US President Donald Trump dismissed AI critics as "very negative forces" and vowed to maintain the US's industry leadership. The recent surge in AI-related trades has been a major contributor to the rise in global equities since OpenAI introduced ChatGPT in 2022.

However, recent cyberattacks by rogue AI agents and public opposition to data center construction have fueled opposition to the industry's growth. AI safety discussions between the US and Chinese governments are scheduled for this month, according to sources familiar with the matter.