Why Wall Street is blowing off fears of an AI apocalypse
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Illustration: Allie Carl/Axios
Equity investors largely yawned Monday at warnings about AI wiping out humanity, suggesting traders aren't pricing in an existential threat.
Why it matters: AI leaders are increasingly sounding the alarm about the pace of AI development and risks of uncontrolled superintelligence, saying that the U.S. government and China should agree to a slowdown.
By the numbers: While chipmakers fell, the Nasdaq — which is full of AI stocks — pared heavier losses and closed Monday down only 0.6%.
- The S&P 500 posted a 0.5% decline, while the Dow Jones Industrial Average fell slightly.
Zoom in: The fact that President Trump rejected the prospect of a regulatory slowdown might've been all Wall Street wanted to hear.
- He said Monday that fears of "AI taking over the World, destroying Humanity, and all other things bad, is a HOAX," arguing that the U.S. needs to beat China on AI.
- "The only control or 'guardrails' that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades!" Trump wrote on Truth Social.
- A Chinese Foreign Ministry spokesperson also rejected calls for a coordinated slowdown, disparaging the apocalyptic narrative and saying AI should be open and beneficial to all.
What they're saying: Deepwater Asset Management managing partner and longtime tech analyst Gene Munster said on X that "there's no way these companies are going to measurably back off," citing competitive pressures both with each other and between the U.S. and China.
- Other traders are betting that the benefits of AI will outstrip the risk of economic destruction.
- Yardeni Research president Ed Yardeni wrote Monday that they're "still strong believers in our Roaring 2020s scenario, hinging on a productivity boom that strengthens economic growth even as it contains inflation."
Between the lines: While AI leaders like Anthropic's Dario Amodei and OpenAI's Sam Altman are sounding the alarm, it's Nvidia CEO Jensen Huang whose narrative is prevailing on Wall Street — at least for now.
- "The fact that this is going to be the end of humanity — it's complete nonsense," Huang told Axios' Mike Allen in July. "The fact that this is going to destroy half of the American jobs is complete nonsense."
The bottom line: This wouldn't be the first time Wall Street had its head in the sand — but it also wouldn't be the first time that investors accurately ascertained reality.
