AI Safety Warnings Push Nasdaq Lower as Chip Stocks Retreat

Teradyne shares fell more than 13% and Arm Holdings dropped over 9% on Monday, exposing the market’s most sensitive fault line: a technology boom priced on ever-faster artificial intelligence development.

The Nasdaq Composite lost about 0.6%, while the S&P 500 fell roughly 0.7% and the Dow Jones Industrial Average slipped 0.3%. Losses were steeper at the open before buyers returned, but the retreat still pushed the Nasdaq 100 to a six-week low, according to market data reported by Yahoo Finance.

Nvidia was among the session’s biggest drags, sliding 3.4%. The company’s chips have become the financial plumbing of the AI buildout, so any suggestion that model development might slow immediately raises questions about data-center orders, accelerator demand and the enormous capital budgets supporting them. Advanced Micro Devices, Broadcom, Analog Devices and other semiconductor names also weakened.

The trigger was unusually direct. Anthropic Chief Executive Dario Amodei argued over the weekend that the industry should deliberately pace the development of increasingly capable models, giving safety systems time to catch up. OpenAI CEO Sam Altman echoed the call in interviews, saying the company could remain profitable even if development slowed and suggesting that leading labs may coordinate on safeguards. Elon Musk also backed a slower pace.

That message collides with the economic logic underpinning the AI trade. Hyperscalers and model developers have been committing billions of dollars to chips, servers, networking equipment and power infrastructure on the assumption that capability gains will continue quickly enough to justify the spending. A coordinated pause would not erase that demand, but it would challenge the timetable and the valuations attached to it.

Investors also had to weigh a political obstacle. President Donald Trump has argued against slowing U.S. AI development, framing the race as a strategic contest with China. That leaves markets facing an awkward split: the executives funding and building frontier systems are warning about safety risks, while Washington is emphasizing speed and national advantage, according to the Associated Press.

The selloff was concentrated rather than indiscriminate. Cybersecurity companies rallied as investors considered the commercial need to defend against more powerful automated attacks, while some software and internet businesses held up better than chipmakers. Wall Street was not abandoning AI. It was repricing the machinery behind it.