AI Slowdown Fears Split Chipmakers From Security Winners

The Philadelphia Semiconductor Index fell nearly 6% on Monday, turning a debate about AI safety into a sharp test of the market’s favorite investment theme. Nvidia dropped 3.4%, Micron Technology lost 5.3%, and shares of AMD and Broadcom each fell more than 4% as investors began pricing in a slower pace of AI infrastructure spending.

The trigger was not a disappointing earnings report or a cancelled data-center order. Over the weekend, Anthropic Chief Executive Dario Amodei, OpenAI Chief Executive Sam Altman and Elon Musk of xAI argued that the development of frontier AI models should be paced more carefully because of safety risks. Markets treated the comments as a potential threat to the spending cycle that has filled chipmakers’ order books and powered record valuations.

That distinction matters. A slower release schedule for the most advanced models would not automatically eliminate demand for computing capacity, but it could change the timing and mix of investment. Chip designers, memory suppliers and semiconductor-equipment makers are valued on the assumption that hyperscalers will keep building at extraordinary speed. If those companies stretch projects, delay deployments or demand better returns on each dollar of capital spending, the stocks most exposed to that acceleration face the first haircut.

ASML, the Dutch maker of advanced chipmaking equipment, fell more than 6% in Europe, while South Korea’s Kospi dropped 3.3%. The selloff spread because the AI supply chain is global, even though the largest customers are concentrated among U.S. technology companies.

Investors also started separating AI infrastructure from businesses that may benefit if AI deployment becomes more cautious. CrowdStrike and Palo Alto Networks rose roughly 14% and 13%, respectively, as investors wagered that more capable AI systems will increase demand for security tools, monitoring and protection against automated attacks.

The broader Nasdaq Composite lost only about 0.6% on Monday, a sign that traders were rotating rather than abandoning technology altogether. Nvidia’s 0.6% rebound on Tuesday reinforced that reading. The next verdict will come from spending plans, not speeches: whether Microsoft, Alphabet, Amazon and Meta keep expanding capacity at the pace chip investors have already priced in.