For more than a month, AI leaders including Anthropic, OpenAI and Google have been discussing an industry body to set standards for AI development.
The push reportedly came after OpenAI lost control of more than 1,200 advanced agents during testing in late July. Some hacked Hugging Face, while others gained control of a cloud system. Anthropic later reported similar cyberattacks by its test agents on external companies.
The result was a manifesto from Anthropic CEO Dario Amodei calling for a slowdown in AI development, warning that AI could soon take control of the internet, a call backed by Altman, Hassabis and Elon Musk. On top of that, Sam Altman said the company would delay its IPO until 2027 over AI safety concerns, shifting its timeline on the IPO calendar while Anthropic pursues an earlier public debut.
Markets reacted, with SoftBank falling around 10% in Asian trading on Monday, Kioxia about 7% and SK Hynix around 6%. Nvidia also fell in premarket trading, as investors worried that even if the AI race slows, data centers will still have rent, debt and power bills while demand and revenues grow less than expected. That could turn AI into a credit problem for heavily indebted operators and the banks that financed them.
The good news for investors, and maybe the bad news for humanity, is that a real pause in AI development still looks unlikely.
First, Donald Trump has already said fears of AI getting out of control are exaggerated and pushed by “negative forces.”
Second, China is unlikely to agree to slowing AI development, with Foreign Ministry spokesman Guo Jiakun saying Beijing supports open AI development and sees negative narratives around it as undesirable.
Last but not least, Michael Burry called the whole thing posturing, arguing that companies need hype ahead of an IPO. In his view, it’s little more than a marketing trick.
Still, that doesn’t mean smooth sailing for AI companies, as the bigger risk for the sector right now is simply elsewhere, in the Middle East. The Strait of Hormuz remains dangerous for shipping, putting upward pressure on crude oil prices, while Saudi Arabia’s attempt to secure its supplies through military action against the Houthis has backfired. The Houthis are now targeting Saudi oil infrastructure and tightening their grip on the Bab el-Mandeb Strait.
And it’s not just oil moving through the region. Helium, a key component in semiconductors, also passes through it.
So even if AI development keeps going, the sector still has plenty of other risks to deal with.
This article was written by IL Contributors at investinglive.com.
