Hong Kong (AFP) – Tech firms tumbled Monday after leaders of companies at the forefront of the AI 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 the Federal Reserve will hike interest rates this week.
Chipmakers led the selling in Asia after Anthropic CEO Dario Amodei called Saturday 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 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 percent 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 Monday.
Tokyo-listed tech investment titan SoftBank plunged more than 12 percent, while chipmaker Kioxia shed more than seven percent and Advantest more than two percent. South Korea’s SK hynix and Samsung were also sharply lower. Seoul’s Kospi index led losses on broader markets, with Tokyo, Hong Kong, Shanghai, Taipei, and Manila also lower. There were gains in Sydney, Singapore, and Wellington.
The selling was also being fuelled by expectations the Fed will increase borrowing costs Wednesday as it tries to combat stubbornly high inflation, which data showed last week remained well above the bank’s two percent target. The “Fed meeting sees the swaps market implying a 92% probability of a hike, with 50 basis points of cumulative tightening assumed by year-end,” said Chris Weston at Pepperstone. “Psychologically, a Fed hiking cycle rarely does risk assets many favours, particularly if both nominal and real Treasury yields are breaking to new highs and equity markets continue to find sellers into rallies.”
And National Australia Bank’s Rodrigo Catril added that the decision not to hike would “carry credibility risks and, with a hike almost fully priced, a disappointing hold could trigger a Treasury sell-off.” The likelihood of inflation coming down any time soon has been hit by the Middle East crisis as oil prices sit well above $100 a barrel. Both main contracts jumped more than two percent Monday after Riyadh shut its East-West pipeline following drone attacks by Yemen’s Houthi rebels, while a merchant vessel was struck in the Strait of Hormuz. The Houthis have been cementing their hold on the Bab Al-Mandab strait, a vital shipping corridor linking Europe and Asia that has been used as an alternative to Hormuz.
The conflict sent average diesel prices in the United States above $6 a gallon on Friday for the first time, a shock increase for a key fuel in the transport and agriculture sectors. Meanwhile, Oman said it had postponed talks between Iran and Gulf states on the future of the strategic waterway, a vital route for a large share of the world’s seaborne oil trade.
– Key figures at around 0230 GMT –
West Texas Intermediate: UP 2.3 percent at $102.30 per barrel
Brent North Sea Crude: UP 2.2 percent at $106.93 per barrel
Tokyo – Nikkei 225: DOWN 0.8 percent at 63,498.61 (break)
Hong Kong – Hang Seng Index: DOWN 0.2 percent at 24,764.02
Shanghai – Composite: DOWN 0.2 percent at 3,878.88
Dollar/yen: UP at 153.85 yen from 153.71 yen on Friday
Euro/dollar: DOWN at $1.1588 from $1.1596
Pound/dollar: DOWN at $1.3518 from $1.3527
Euro/pound: DOWN at 85.72 pence from 85.73 pence
© 2024 AFP
