Key facts
- AI leaders including Anthropic, OpenAI, and Google DeepMind endorsed slowing AI development.
- Goldman Sachs warned AI safety pledges could lead to a 15-20% downside to the S&P 500's valuation multiple.
- Microsoft, Amazon, Alphabet, and Meta are projected to spend $735 billion on AI data center infrastructure in 2026.
- Nvidia, Microsoft, Alphabet, Amazon, and Meta represent approximately 24% of the S&P 500 benchmark.
- Software stocks led the selling, with ServiceNow down 5%.
Tech stocks declined on Monday after prominent AI executives, including leaders from Anthropic, OpenAI, and Google DeepMind, publicly called for a slowdown in "reckless" development due to safety concerns. This unprecedented coordinated stance has impacted market sentiment, which has been heavily influenced by AI-driven growth.
Goldman Sachs research suggests that these AI safety pledges could lead to a pullback in spending by major cloud providers like Microsoft, Amazon, Alphabet, and Meta on AI data center infrastructure. These companies are collectively projected to invest approximately $735 billion in AI data centers by 2026. A reduction in this spending could significantly affect the earnings thesis for the S&P 500, with Goldman Sachs estimating a potential 15% to 20% erosion of the index's valuation multiple.
The market reacted swiftly, with Nasdaq futures pointing to a 1.3% drop, and software stocks, including ServiceNow, experiencing declines. Semiconductor stocks also extended a slide, as their growth is closely tied to hyperscaler capital expenditure. Nvidia, Microsoft, Alphabet, Amazon, and Meta represent about 24% of the S&P 500 benchmark, making their investment plans crucial for the index's performance.