Investors Wary of AI Spending Slowdown Amid Industry Warnings

Investors Grow Cautious as AI Spending Slowdown Threatens Market Rally

Market Reactions and Investor Concerns Over AI Spending

NEW YORK, Sept 15 (Reuters) – Investors are showing some nervousness over the stock market’s AI-led rally after industry leaders called for reining in the pace of development — although some say guardrails could ultimately benefit the AI sector.

Calls for Slowing AI Development

Recent dire pronouncements about AI potentially endangering humanity were followed over the weekend by calls from AI leaders, including Anthropic CEO Dario Amodei, to slow the rate of advancement and create more time to manage its risks.

The Impact of AI Spending on the Stock Market

Massive spending from tech giants to build AI data centers has benefited a wide swath of companies and their stock prices, helping the S&P 500 more than double since a bull market that began in October 2022. Wall Street has been on guard for any signs that such spending — which is expected to reach nearly $800 billion in 2026 — could lose steam.

“This becomes a problem if in fact you see orders being cancelled, you see data centers, construction deals being cancelled,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “I need to see something concrete that, in fact, there is a slowdown versus just talk.”

Valuation Questions for Leading AI Firms

A forced pause from OpenAI and Anthropic, the leading AI developers, could raise questions about valuations for the two firms, both of which are expected to sell shares to the public in the future. With these companies eventually expected to be publicly owned, “shareholders are going to be demanding of them to continue to grow,” Carlson said.

AI CAPEX Winners Hit

So far this year, the broad-market index has gained more than 11%, led by corporate profit growth boosted by the last few years of heavy spending.

The AI hyperscalers — Microsoft, Alphabet, Amazon, Meta Platforms and Oracle — are expected to plunk down around $795 billion this year in capital expenditures and nearly $1.08 trillion in 2027, according to BofA Global Research.

Much of that spending is being funneled toward semiconductor firms, whose shares and profits have soared this year, but bore the brunt of the selling on Monday. The Philadelphia SE Semiconductor Index is still up nearly 60% in 2026.

Market Sensitivity to AI Slowdown

“Markets are punishing the picks-and-shovels layer harder than the hyperscalers because it’s the layer most exposed to a slowdown in the rate of capability improvement,” said Erik Kratz, chief investment officer and co-head of wealth at Arena Private Wealth in Chicago.

However, Kratz said there could be a silver lining in greater scrutiny of the industry’s safety.

“The buildout doesn’t stop because the CEOs asked for guardrails. If anything, a credible safety framework makes the long-duration capex easier to underwrite.”

AI Doubts Add to Rate Worries for Stocks

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