The FTSE 100 rose on Monday after a dramatic weekend of debate over AI development and safety measures among the world’s leading AI CEOs.
Markets opened on Monday and quickly priced in a blog post by Anthropic’s CEO calling for a slowdown in AI development that outlined proposed safety measures.
The suggestions drew a range of responses from the industry, from calling the CEO out for a poor attempt at altruism to questioning whether his suggestions would actually work.
Despite the furore over the weekend, reports broke on Sunday that Anthropic has selected its listing venue and is pushing ahead with its IPO, which is estimated to value the company at $2 trillion. You could argue the blog post was a PR stunt.
Nonetheless, NASDAQ futures fell Monday morning as traders took a sell-first, ask-questions-later approach.
However, the comments were made against a backdrop of an AI trade that has already weakened over the past few months, with a lot of the froth extracted from some of the racier names already, so the fallout may not be as dramatic as it otherwise might have been.
The FTSE 100 shrugged concerns off on Monday and rose 0.5% because it has little tech exposure.
While the Anthropic CEO’s comments make nice headlines for mainstream media, the reality is that even if model development slowed to a snail’s pace, they are already powerful enough to drive major efficiencies for the businesses that adopt them.
This will underpin the AI trade for months to come.
Indeed, the US President publicly backed the AI industry over the weekend, saying: “Whoever wins AI, wins”, in reference to the race with China for AI supremacy. He shows no signs of wanting a slowdown.
“I see this less as a sign that AI demand is weakening and more as evidence that development has moved faster than the safeguards around it. More testing is sensible, particularly for AI systems that can act independently,” said Charu Chanana, Chief Investment Strategist at Saxo.
“A complete or lasting slowdown looks unlikely. Competition between AI companies remains intense, while governments see AI leadership as strategically important, particularly given the race between the US and China.”
The impact on FTSE 100 companies was pronounced on Monday. Companies hit hard by concerns about AI disruption earlier this year jumped in a mini relief rally.
RELX, London Stock Exchange Group, Experian and Sage were among the top risers, seemingly on hopes that a slowdown in AI development will ease pressure on their business models. Views differ on whether this is detrimental in the first place.
Many of the FTSE 100’s more defensive heavyweights were also higher, helping the index rise on Monday. AstraZeneca, GSK, Unilever, and British American Tobacco were all in favour.
Miners were among the FTSE 100’s biggest detractors as AI-focused investment trust Polar Capital Technology Trust dropped, reflecting concerns about the reaction in US tech shares after the weekend’s developments.