Wall Street hit by tech sell-off after AI bosses push for slowdown

Tech stocks fell sharply on Monday after AI companies called for a slowdown in the development of the technology.

The Nasdaq Composite dropped as much as 1.3pc to 25,992.54 after Anthropic's chief executive Dario Amodei called for tech companies to reduce the speed of its development.

The tech-heavy index was particularly vulnerable to the sell-off. Sandisk, Intel and Micron all fell more than 6pc, while Nvidia, the world's largest company by market value, was 3.8pc lower.

The Dow Jones Industrial Average dropped as much as 0.4pc to 52,385.52 and the benchmark S&P 500 declined 0.8pc to 7,597.05.

Mr Amodei's call for an AI slowdown could mean less spending on data centres and AI chips, which have powered the stock market rally of the last two years.

However, Donald Trump rejected calls for a slowdown, saying there was a "sick conspiracy" against AI.

Thanks for following today's coverage as the fallout to calls for an AI slowdown continues.

We'll be back tomorrow morning.

JD Vance, the US Vice-President, has rejected calls from tech leaders for a slower pace of AI development and government regulation, calling their requests "a Trojan horse."

Mr Vance said: "I have to say, just personally, I feel a little bit weird about the fact that you have so many frontier AI tech companies kind of coming to the Government and begging the Government to regulate them."

"It feels a little bit to me like a bit of a trojan horse."

It comes as Donald Trump also dismissed calls for safety guardrails, arguing a strong president and regulatory enforcement are sufficient, while warning that slowing down would cede AI leadership to China.

Meanwhile, Democrats, led by Chuck Schumer, the Senate Leader, and Barack Obama, are calling the rapid private-sector expansion of AI potentially dangerous if left unchecked.

"This is something that is moving very fast in private hands, and if we don't get on top of it, I think it can be dangerous," the former President said.

Bernie Sanders and right-wing activist Steve Bannon are uniting to demand stricter guardrails on AI at a bipartisan "Pro-Human Assembly" in Washington.

Senator Sanders has called for a federal regulator and a permanent ban on "superintelligent" AI, amid fears of tech companies losing control of rapidly advancing models.

Mr Bannon has endorsed these proposals, mobilising his audience against both the industry and the Trump administration's deregulatory approach.

The coalition, which includes lawmakers from both parties, reflects growing public anxiety, with two-thirds of Americans viewing AI as a high risk to society.

Mr Sanders said last week: "Nearly every day, there is a frightening new story about how Big Tech companies are losing control of the technology they are developing, with potentially cataclysmic results."

"It is irresponsible for society to allow them to move forward and make these products even more advanced."

Artificial intelligence has "enormous" potential to help Britain develop fusion energy, according to the UK's energy minister.

Michael Shanks told The Telegraph that the UK must harness the power of AI to run a more efficient energy system despite its "challenges".

Britain signed an agreement with the US on Monday afternoon to help speed up the development of fusion, which releases huge amounts of energy by combining hydrogen atoms, essentially replicating the process that powers the sun.

Under the agreement, UK and US fusion supercomputers will be connected across the Atlantic, allowing AI models in both countries to be trained on shared data.

The US and UK have also committed to closer cooperation on regulating fusion energy as part of a bid to attract investment.

Michael Shanks told The Telegraph: "AI has got enormous potential to help get us to fusion energy faster, but also to run a more efficient energy system.

"But clearly, the pace of the rollout of that comes with challenges that we have to face, and where there are risks that have surfaced, we should take those very seriously."

He added: "I think it is important that we absolutely are driven by a regulatory approach.

"I think there is a real chance for us to get all the advantages from AI but manage it carefully. But there's no doubt this is a fast-moving landscape, faster than perhaps technology has moved for a very long time, and we have to be on top of that."

Mark Carney, the Canadian Prime Minister, has called for a global "technology stability board" to ensure AI is developed safely.

Modelled after the Financial Stability Board, Mr Carney said the body is necessary because international coordination is required to prevent advanced AI systems from causing harm while maximising value creation.

Mr Carney told Bloomberg: "There's a need for coordination. A technology stability board, in our view, along the lines of the Financial Stability Board, makes sense."

"It's an opportunity - and I think ultimately what it's going to mean is greater value creation and greater value delivery to people."

His call for global guardrails contrasts with comments made by Donald Trump, who has dismissed calls for AI regulations and criticised tech bosses backing a slowdown.

OpenAI has called on the Government to introduce mandatory safety rules for major AI developers.

Under the proposed framework, the UK's AI Security Institute (AISI) would play a central role in third-party testing and creating adaptive technical standards.

Tom Guff-Gordon, the company's head of policy in EMEA, told Politico: "OpenAI is in a position to support legislation in the UK to establish durable, mandatory, capability-based requirements for frontier AI that would build on the set of voluntary commitments that we currently have."

This legislation would transition current voluntary agreements into enforceable standards, bringing the UK in line with emerging frameworks in the EU and US.

OpenAI is calling for a narrow regulatory scope focused on high-risk national security, cybersecurity, and safety incident reporting for advanced models.

The recommendation comes as the Labour Government faces mounting pressure from lawmakers to address AI safety following recent industry incidents and safety concerns.

Donald Trump launched a personal attack against the boss of Claude chatbot-maker Anthropic after he called for a slowdown in the technology's development.

The US president said Dario Amodei was pretending to be a "perfect little angel" after suggesting that calling for an industry-wide slowdown at the weekend.

He wrote on his Truth Social platform: "There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China."

US tech stocks fell sharply in early trading on Monday after AI companies called for a slowdown in the development of the technology.

The Nasdaq Composite plunged as much as 1.3pc to 25,992.54 after Anthropic's chief executive Dario Amodei called for tech companies to reduce the speed of its development.

The tech-heavy index is vulnerable to the sell-off, given that the sector accounts for approximately 60pc of its entire weight.

Sandisk, Intel and Micron all fell more than 6pc, while Nvidia, the world's largest company by market cap, was 3.8pc lower.

The Dow Jones Industrial Average dropped as much as 0.4pc to 52,385.52 and the benchmark S&P 500 declined 0.8pc to 7,597.05.

US tech companies are pushing for more AI regulation to protect themselves from rising competition, analysts have said.

Richard Farr, chief market strategist at Pivotus Partners, suggested calls for regulation are designed to stifle competition.

He likened it to MIFID (Markets in Financial Instruments Directive), an EU law which regulates financial markets and investment services.

"If you're struggling to justify your pricing and afraid of competition, you bring in regulation to create a regulatory moat," Mr Farr posted on X. "It's basically MIFID, but for AI."

His comments echoed those of sceptics such as The Big Short's Michael Burry, who called the efforts "self-serving".

The FTSE 100 rose on Monday as investors sought safety from the tech sell-off.

The UK's flagship stock index was up 0.6pc as software companies were boosted by the potential slowdown in AI.

It was also boosted by higher oil prices, which lifted Shell and BP by more than 1pc.

By contrast, the Cac 40 in Paris was down 0.9pc in afternoon trading, while the Dax in Franfurt was down 0.9pc, after US tech leaders called for a slowdown in AI development.

Charu Chanana of Saxo Bank said: "In the short term, these warnings could still weigh on AI and chip stocks.

"Their valuations assume both strong demand and a relentless pace of technological progress,.

"When expectations are this high, even a possible delay can trigger profit-taking."

Andy Burnham welcomes the new focus on the dangers AI could pose to the world, Downing Street said.

The Prime Minister thinks it is a "good thing" that leading AI figures are publicly speaking about the risks from the technology to global security, his official spokesman said.

Mr Burnham has cancelled engagements today and tomorrow following the death of his father Roy, who was suffering from Alzheimer's.

Asked about the new industry focus on AI safety, the Prime Minister's official spokesman said: "What the Prime Minister thinks is that it's a good thing that the companies developing the most advanced AI systems are now talking openly about the risks as well as the opportunities.

"These risks cross borders. That's why we're working closely with the companies developing the most advanced systems and with our allies and international partners.

"It's also why the AI Security Institute exists to build a rigorous, scientific understanding of the capabilities of the most advanced AI systems and the risks they pose, so that policy decisions are grounded in evidence rather than speculation."

The spokesman also insisted that AI "offers huge opportunities that we want the UK to tap into", including for transforming how public services are delivered, and raising living standards.

Telegraph readers were sceptical of the calls for a slowdown in AI development from some of the most high profile figures in US tech.

You can read some of their comments below and join the debate here.

The AI-linked rally that has seen world stock markets soar over the last two years is showing signs of vulnerability, the Bank for International Settlements (BIS) warned.

The institution, known as the central bank for central banks, said investors were becoming "increasingly cautious" about the profitability of future AI investments, especially as the leverage of major US tech firms continued to rise.

Frank Smets, head of economic analysis at BIS, said: "The AI momentum, which had propelled equity markets and contributed to the resilience of the global economy of the last year, has begun to show growing signs of vulnerability."

The comments were made on Friday, ahead of the BIS report's publication on Monday and before the sharp downturn in tech stocks.

The BIS report also pointed to an uncertain global backdrop of strains on public finances, exacerbated by geopolitical tensions and volatile energy prices.

Mr Smets added: "It's related to the fiscal fragility that comes also with higher uncertainty in the world economy."

Silicon Valley's tech giants have spent the last few years competing in a trillion-dollar arms race to create superintelligent AI.

Now they say we should all slow down.

Dario Amodei, Anthropic's chief executive, called for co-ordinated "pacing" of AI development, saying we might have just six months until the technology unleashes catastrophic damage on the world.

Some hailed Amodei's intervention as a valiant attempt to save the world, while others thought it was far more self-serving, particularly as he prepares Anthropic for a historic stock market listing.