Tech stocks slide as AI extinction warnings rattle markets

Tech stocks plummeted worldwide on Monday after leading AI figures urged the industry to slow development due to safety concerns. Japan’s SoftBank lost up to 13%, while Kioxia and SK Hynix dropped 9.8% and 5% respectively. South Korea's Kospi index fell, and Taiwan's TSMC declined 1.2%. The sell-off came after Anthropic CEO Dario Amodei warned that AI companies should "slow the pace" of their most powerful models.

OpenAI CEO Sam Altman and Elon Musk also backed the call, marking rare agreement among three fierce rivals. US markets were expected to follow Asia's decline. Analysts suggested a slowdown in data centre rollout or reduced demand for chips could impact big-name stocks. The AI boom had driven global markets higher, but investors grew sensitive to any potential slowdown in spending, especially as valuations rose and production capacity expanded.

Samsung and SK Hynix planned to invest over $500 billion in a new South Korean chipmaking hub, while Kioxia and Sandisk aimed to expand memory chip supply by more than $31 billion. Experts warned that oversupply risk could arise if new capacity arrived before demand. The recent concerns were triggered by Amodei's promise of greater access to Anthropic's safety work and calls for rivals to coordinate on reducing the pace of model development.

OpenAI also said that slowing AI development had become a primary discussion topic. The fallout followed Anthropic researcher Jacob Coxon's recent resignation from the company, accusing them of "racing straight to self-improving superintelligence and gambling with our lives." The UK parliament's Joint Committee on Human Rights warned of novel and serious human rights risks posed by AI, and markets were already nervous ahead of this week's Federal Reserve decision.

Analysts cautioned that Monday's sell-off might be short-lived, as greater use of existing AI models could still drive demand for chips and data centres.