Chip Stocks Tumble After AI Leaders Call for a Slowdown, Led by Nvidia and Arm

Technology stocks, and chipmakers in particular, fell sharply on Monday after the chief executives of Anthropic and OpenAI called for the industry to slow the pace of AI development, NBC News reported. The Philadelphia Semiconductor Index dropped 5.8 percent, its worst day since July.

The Nasdaq 100 fell as much as 1.8 percent during the session but recovered; in early trading, NBC’s live blog had put the Nasdaq 100 down 1.3 percent. The Nasdaq Composite closed down 0.56 percent. The S&P 500 lost 0.48 percent, and the Dow Jones Industrial Average fell 152 points, with Caterpillar down 4.2 percent. A rally in software and cybersecurity stocks drove part of the recovery, NBC said.

Among individual names, Nvidia fell 3.36 percent, Arm Holdings 9.7 percent, ASML 7.2 percent, Applied Materials 7 percent, CoreWeave 6.7 percent and Micron 5.2 percent, with AMD and Intel down about 5 percent each. Abroad, South Korea’s Kospi fell more than 3 percent, with Samsung down about 5 percent and SK Hynix down more than 7 percent. In Tokyo, SoftBank, an investor in OpenAI, dropped 10.7 percent. NBC said Germany’s DAX closed down 0.5 percent and France’s CAC 40 down 0.8 percent.

The trigger was Anthropic CEO Dario Amodei’s Saturday post saying companies “must slow the pace at which we improve the capabilities of AI models.” OpenAI’s Sam Altman wrote “I agree with Dario,” and later said that pacing does not mean stopping, NBC reported. Elon Musk wrote “Dario is right,” and SpaceX, which owns xAI, fell 2 percent. Altman told Fortune that OpenAI will not go public this year, calling it an “ill-advised moment” given safety concerns, NBC said.

President Donald Trump rejected the warnings. He called concerns about AI a “hoax” on social media, NBC reported, and said AI “will not be stopped.” NBC’s live blog said he wrote that the only guardrail the country needs is a “high IQ” president, and that he suggested the government could pursue penalties against AI companies. China’s Foreign Ministry dismissed the calls from U.S. tech leaders as “fearmongering” and part of a “Cold War playbook,” NBC said.

Analysts were divided on what the selloff means. Jim Reid of Deutsche Bank asked whether it is the first sign that the AI investment boom might moderate, but said that seems unlikely for now because rival firms and countries are unlikely to step back voluntarily. Max Kettner of HSBC said the fears for tech are overblown, NBC reported.

The AI drop was only part of a difficult day for investors. Markets are pricing in an 85 percent chance of a Federal Reserve rate hike on Wednesday after core inflation came in hotter than expected, according to NBC. The 30-year Treasury yield hit 5.38 percent, its highest since 2007, and the 10-year reached 5.014 percent, its highest since 2023, though both reversed later in the day. Technology firms borrow heavily to fund AI data centers, so higher rates raise their costs, NBC noted.