AI Development Slowdown Impacts US Data Center Stocks

Post Today•Economy•13h ago

Reader Briefing

Wall Street investors are selling off data center and AI infrastructure stocks following a proposal to slow down AI model development.

•Dario Amodei, CEO of Anthropic, suggested slowing the development pace of frontier AI models.
•Shares of companies including Oracle, GE Vernova, Vertiv, and Caterpillar declined significantly.
•Data center industries in the US face additional pressure from community opposition to construction.
•Companies are rushing to raise capital through bond markets before conditions tighten further.

Overview

•Dario Amodei, CEO of Anthropic, suggested slowing the development of frontier AI models, though he clarified this does not mean stopping model training.
•Investors sold off shares of Oracle, GE Vernova, Vertiv, and Caterpillar following the statement from Dario Amodei.
•GE Vernova shares dropped nearly 9%, Vertiv nearly 8%, while Caterpillar and Oracle both decreased by approximately 4%.
•The US data center growth has relied on technology leaders such as Anthropic and OpenAI and expanding AI demand.
•Rishi Jaluria of RBC Capital Markets stated that slowing AI model development would directly negatively impact Oracle's cloud infrastructure business.
•The data center industry is facing community opposition against construction across the US.
•Amazon raised approximately 4.25 billion pounds (nearly 6 billion US dollars), and Alphabet raised approximately 10 billion US dollars through Euro-denominated bonds.
•Companies are expected to accelerate capital raising for AI projects within the next 6 weeks before capital market conditions tighten.

Full article content is available on the original source.

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Source: Post Today (Original)

Key Quotes

Anonymous source

"Currently, bond market investors require higher returns to compensate for the risk they must take."

ขณะนี้นักลงทุนในตลาดตราสารหนี้ต้องการผลตอบแทนที่สูงขึ้น เพื่อให้คุ้มค่ากับความเสี่ยงที่ต้องรับ

Key Entities

Person

Dario Amodei(ดาริโอ อาโมเด)ℹ️

CEO of Anthropic who proposed slowing the development of frontier AI models.

Rishi Jaluria(ริชิ จาลูเรีย)

An analyst from RBC Capital Markets.

Organization

Anthropicℹ️

A leading technology company driving the growth of the US data center era.

OpenAIℹ️

A leading technology company driving the growth of the US data center era.

Oracleℹ️

A cloud and data center service provider that laid off employees in slow-growth departments to fund processing systems.

GE Vernovaℹ️

A company providing AI energy equipment that invested heavily in server support equipment.

Vertivℹ️

A data center infrastructure and equipment company.

Caterpillarℹ️

A heavy machinery and energy company that invested in AI server support equipment.

RBC Capital Marketsℹ️

The organization where analyst Rishi Jaluria is employed.

Nebiusℹ️

A new cloud provider acting as a mechanism for providing infrastructure to Hyperscalers.

CoreWeaveℹ️

A new cloud provider acting as a mechanism for providing infrastructure to Hyperscalers.

Dellℹ️

A major server manufacturer relying on the continuous expansion of data centers.

Hewlett Packard Enterpriseℹ️

A major server manufacturer (HPE) relying on the continuous expansion of data centers.

Amazon

A company that raised approximately 4.25 billion pounds for new funding.

Alphabetℹ️

A company that raised approximately 10 billion US dollars through Euro-denominated bonds.

CNBCℹ️

The news agency reporting on Wall Street's warnings regarding the data center industry.

Place

USA(สหรัฐฯ)ℹ️

The location where data center infrastructure and AI developments are centered.