ASX eyes flat start, AI stocks weigh on Wall Street after calls for slowdown

Artificial-intelligence stocks are sliding worldwide after leaders of the industry warned a slowdown is needed for the safety of humanity. Another jump in oil prices, meanwhile, briefly sent the bond market to its latest pressure-raising milestone as the yield on the 10-year Treasury touched 5 per cent for the first time since 2023.

Despite all the downers for Wall Street, gains for many stocks outside AI helped limit the market’s losses. So did a midday tempering of oil prices, and the S&P 500 fell a relatively modest 0.3 per cent as more stocks rose within the index than fell.

The Dow Jones Industrial Average was down 116 points, or 0.2 per cent, as of 2:02 p.m. Eastern time, and the Nasdaq composite was 0.1 per cent lower after clawing back most of an early loss of 1.3 per cent. The Australian sharemarket is set to edge up, with futures at 4.50am AEST pointing to a rise of 5 points, or 0.1 per cent, at the open. The ASX closed flat on Monday. The Australian dollar was trading at US71.45¢.

AI stocks have been under pressure a while because of worries their prices shot too high in the frenzy around the technology. The concerns jumped to another level over the weekend after one of the industry’s leading voices, Anthropic CEO Dario Amodei, called for a deliberate and global slowdown in the development of AI.

He cited safety issues, including the risk that AI becomes capable of leading a swarm of agents that could take over the entire internet within six to 12 months.

Nvidia, whose profits have soared because its chips are helping to train AI models, sank 2.8 per cent and was the heaviest weight on the market because of its massive size.

SpaceX, which gets a chunk of its business from AI, rose 0.4 per cent after Elon Musk said over the weekend that he agrees with Amodei. Softbank Group, the Japanese giant that is a major investor of OpenAI, lost 10.7 per cent in Tokyo after OpenAI’s Sam Altman likewise supported the concept of a slowdown.

Altman also said in an interview with Fortune published on Saturday that OpenAI would likely wait until next year for a sale of its stock on Wall Street, potentially delaying a gusher of cash for Softbank and other early investors in OpenAI.

In South Korea, the Kospi index dropped 3.3 per cent due to losses for its two most influential stocks, Samsung Electronics and SK Hynix.

President Donald Trump played down the need for his administration to check the development of AI, saying he worried about ceding his country’s edge over China in a global competition and that winning would help address the risks from the advancing technology.

Even with so many voices inside and outside the AI industry calling for a slowdown to protect humanity, Trump said on his social media network on Monday that the only guardrail it needs “is a STRONG AND SMART (High IQ!) PRESIDENT, and the USA. has that, in spades!”

Helping to limit Wall Street’s losses on Monday were several software companies that tumbled earlier on worries AI-powered competitors would undercut their businesses.

Intuit, the company behind TurboTax and QuickBooks, rose 5 per cent.