Tech stocks hit by AI slowdown call as US Fed expected to hike rates

The US Federal Reserve is expected to increase borrowing costs on Sept 16 as it tries to combat stubbornly high inflation.

HONG KONG – Stocks of tech firms tumbled on Sept 14 after leaders of companies at the forefront of the artificial intelligence boom backed calls for a slowdown in development in the sector amid warnings that it could pose a threat to humanity.

The equity market losses were compounded by another spike in oil prices after Saudi Arabia closed a key pipeline, while US inflation data did little to lower expectations that the Federal Reserve will hike interest rates this week.

Chipmakers led the selling in Asia after Anthropic chief executive Dario Amodei on Sept 12 called for AI companies to “pace the frontier” – or coordinate a slowdown in the technology’s development – to allow a better understanding of the risks arising.

Key among his concerns is so-called “recursive self-improvement”, or when AI can build its own next generation.

“Left unchecked, it could outrun our ability to understand and control these systems, and so must be pursued very carefully, if at all,” Amodei wrote.

His chief competitors, OpenAI’s Sam Altman and xAI’s Elon Musk, publicly supported him, with Musk saying “Dario is right”.

The comments came after a researcher resigned from Anthropic over fears that the technology could escape human control.

Another, who did not resign, stated publicly that “we really do earnestly believe AI could kill all humans”, and that he thought the chances were greater than “10 per cent within the next decade”.

While US President Donald Trump voiced opposition to the remarks and House Speaker Mike Johnson said “we don’t need everybody to panic right now”, traders sold off their tech holdings on Sept 14.

Tokyo-listed tech investment titan SoftBank plunged more than 12 per cent, while chipmaker Kioxia shed more than 7 per cent and Advantest more than 2 per cent.

Seoul’s Kospi index led losses on broader markets, with Tokyo, Shanghai, Taipei and Manila also lower.