AI apocalypse proves easier to ignore than price

Anthropic CEO Dario Amodei published an essay on September 12 entitled, "We must pace the frontier," calling on the AI industry to slow the rate at which it is improving the capabilities of new models. Elon Musk and Sam Altman, the respective bosses of SpaceX and OpenAI, both said in posts on X the same day that they agree with Amodei's proposals. President Donald Trump said in a Truth Social post on September 14 that the only AI "guardrails" needed are a "strong and smart" president. The shift in tone from breakneck advancement to a measured deceleration has vexed investors. The DRAM ETF, which tracks makers of the memory semiconductors that AI models devour, dropped by 7% and the chipmaking benchmark SOXX also dipped 5%. Server farm operator CoreWeave was vulnerable, according to Bernstein analyst Madison Rezaei, because much of its backlog is suited to training activity that presumably would slow. Its shares tipped about 6% lower. These sorts of moves are hardly unusual, however. CoreWeave’s amounts to roughly one standard deviation over the past year. The DRAM ETF drop is nothing like its double-digit tumbles back in June. Moreover, the VIX index, which measures anticipated volatility, jumped 5% on Monday, but remains sanguine, trading below 17, compared to 90 in October 2008 when financial Armageddon loomed. Training machines saps profitability, meaning investors might just welcome a slowdown. By contrast, Anthropic’s heavily adjusted gross margin, which mostly seems to measure this “inference” expense, surpassed 80%, according to the [Financial Times](https://www.ft.com/content/4564e6a5-69e9-40a6-bf0f-a888f2f4f002). Moreover, an ever-widening series of hacks by OpenAI bots don’t seem to be stoking expectations of society-altering intervention. Ominous-sounding events have had an impact before. Covid-19 initially sent the S&P 500 Index plummeting 34%, reflecting greater sensitivity to infection counts than to deaths, academic researcher Badar Nadeem Ashraf [found](https://pmc.ncbi.nlm.nih.gov/articles/PMC7244441/). Similarly, stocks took [a hit](https://www.rbcwealthmanagement.com/en-us/insights/then-and-now-market-reactions-to-military-conflicts-and-what-they-mean-today) during the early part of the Cuban Missile Crisis in 1962, if somewhat more mildly than might be expected for a looming nuclear war. It's easier, perhaps, to ignore an existential threat when it's theoretical than to put a price on it. It’s a rare issue these days that unites avowed enemies like Elon Musk and Sam Altman. The bosses of SpaceX and OpenAI, respectively, endorsed warnings from their mutual rival Dario Amodei about the escalating threat from influential chatbots all three are developing. Anthropic's CEO added to the apocalyptic vibes, following widespread concerns about AI agents escaping confinement, with a [long essay](https://darioamodei.com/post/we-must-pace-the-frontier) urging the industry to slow down before the technology spirals out of control. Discounting doomsday, however, is proving difficult. Advocating for a slowdown is heretical in Silicon Valley, especially from a founder like Amodei who's teeing up a $2 trillion initial public offering. His memo calls for empowering “third-party” investigators to verify that companies are pacing appropriately and assessing safety. He also wants labs in certain countries to form an alliance and governments worldwide to sign a compact promising restraint. Dismissive responses from President Donald Trump and China’s state-backed Global Times suggest international accord is unlikely. Musk, Altman and Amodei can, however, effect big shifts on their own.

AI apocalypse proves easier to ignore than price

Context from the Reuters note

Investors react, but the moves are not extreme

Profitability and precedent may limit the alarm

AI warnings from top executives ripple through markets

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