Calls to halt the advance of artificial intelligence from within the sector itself due to fears that AI could end humanity and OpenAI’s decision – owner of ChatGPT – to postpone its IPO are translating into stock market declines in the sector this Monday. Technology companies in Europe, the U.S., and Asia are pointing to a day of trading in the red, from SoftBank to Nvidia, including ASML, amid fears of a slowdown in business for the main players and their suppliers.
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In the Old Continent, around mid-session, companies like the German semiconductor manufacturer Infineon reflect the doubts. This Monday it falls 8.5%, while ASML, the Dutch semiconductor equipment manufacturer, falls 6%. Other companies in the energy sector, such as Siemens Energy (-7.5%) or Schneider Electric (-6%), are at similar levels amid the possibility of a slowdown in the deployment of data centers.
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Nasdaq futures, the U.S. tech index, also point to the red. After ten in the morning, futures anticipate a 1.7% drop. Amazon, Meta, Alphabet, or Microsoft anticipate declines of around 1%. The hardest hit appears to be Nvidia, with declines of 2% in pre-market trading, closely followed by Tesla, another company heavily betting on artificial intelligence. “There was a bit of irrational euphoria in mid-summer that has now dissipated,” comments Chris Armstrong from Berenberg on the declines. The environment of higher rates for longer also threatens to pressure their finances by making financing more expensive, although for now investment shows no signs of fatigue.
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In Asia, with the session already closed, the trend has been the same. SoftBank, an investor in Nvidia, has plummeted almost 11% in its worst session in three months. South Korea has also suffered, a stock market recently very exposed to the ups and downs of tech and artificial intelligence. Its index, the Kospi, has dropped 3.3% and has been the worst among the continent’s major markets. Among the declines, SK Hynix chips stand out, losing more than 6%, or the correction in SK Square, an investment firm focused on semiconductors that today falls 8%.
Oil adds more pressure to the market
The market is also affected by the impact of rising oil prices, a front that threatens to entrench high inflation and hit importing economies. “Two unwanted headwinds converge,” says Tim Waterer, chief market analyst at KCM Trade. “Warnings about the need to slow AI development, combined with a new surge in oil prices after the closure of the Saudi east-west pipeline, form a difficult combination for risk assets,” he adds.
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