Asian stocks moved lower on Monday as concerns over a possible slowdown in artificial intelligence development weighed on technology shares.
At the same time, oil prices remained above $100 per barrel, increasing inflation concerns and raising the risk that central banks could keep monetary policy tighter for longer.
Nasdaq 100 futures fell about 1.3%, while S&P 500 futures dropped around 0.6%.
The MSCI Asia Pacific index also declined by roughly 0.5% as investors reassessed whether the current AI investment boom can continue to support elevated valuations and earnings expectations.
AI Slowdown Concerns Pressure Technology Stocks
The debate over artificial intelligence intensified after Anthropic CEO Dario Amodei called for a slower pace of development for the most advanced AI models.
Anthropic also said it plans to introduce additional safeguards, including independent third-party evaluations.
OpenAI CEO Sam Altman supported a more cautious approach to developing advanced AI systems.
Elon Musk also backed the idea, while President Donald Trump dismissed some of the growing concerns as companies continue competing aggressively with Chinese rivals.
Investors Question the AI Spending Boom
The latest warnings have raised questions about whether slower AI development could reduce corporate spending across the sector.
That concern is particularly important for semiconductor companies, cloud providers and other businesses tied closely to the AI investment cycle.
If companies begin reducing spending on advanced models and computing infrastructure, earnings expectations across the technology supply chain could come under pressure.
Asian Technology Stocks Lead the Decline
Technology shares suffered some of the biggest losses across Asian markets.
South Korea’s KOSPI fell around 3.3%, while Japan’s Nikkei 225 dropped about 0.6%.
Hong Kong’s Hang Seng, however, gained roughly 0.2%.
Among major technology stocks, SK Hynix fell about 5%, while Samsung Electronics lost around 2.9%.
Japan’s Kioxia dropped approximately 6.8%, while Murata Manufacturing declined around 3.8%.
Largan also came under heavy pressure, falling about 10%.
SoftBank Falls as OpenAI IPO Expectations Fade
SoftBank Group was one of the biggest losers in Tokyo.
The stock fell as much as 13% after OpenAI CEO Sam Altman said the company would not seek a public listing this year.
The announcement added further pressure on AI-related valuations.
SoftBank has become increasingly exposed to the artificial intelligence sector through its investments, making changes in OpenAI expectations especially important for the company.
Hong Kong Tech Shares Face Additional Pressure
Hong Kong technology stocks also weakened despite the broader Hang Seng index moving slightly higher.
Chinese AI developer Z.AI fell around 7.5% after announcing plans to raise roughly $5 billion through a combination of new shares and convertible bonds.
The new shares were priced below the previous market close.
That raised concerns over shareholder dilution, even though the company plans to use the funds for research, computing infrastructure, expansion and strategic investments.
Oil Prices Stay Above $100
Energy markets added another source of pressure for investors.
Brent crude rose about 2.7% to approximately $107.51 per barrel.
The move followed Saudi Arabia’s decision to shut a key oil pipeline after drone attacks.
A planned meeting between Iran and Gulf states was also postponed, increasing uncertainty around Middle East energy supplies.
Strait of Hormuz Risks Keep Inflation Concerns Elevated
The renewed escalation has kept oil prices firmly above $100 per barrel.
Tensions around the Strait of Hormuz continue to threaten global energy flows.
Persistently high oil prices could keep inflation elevated and make it more difficult for central banks to ease monetary policy.
That creates a difficult environment for both technology stocks and broader risk assets.
Fed Rate Hike Expectations Rise
The oil surge is also complicating the outlook for the Federal Reserve.
Swap markets are now pricing in nearly a 90% probability of a rate hike at Wednesday’s policy meeting.
Investors are therefore reassessing the AI trade at the same time that borrowing costs and inflation risks are rising.
Higher interest rates can place additional pressure on technology valuations because many growth companies are priced on expectations of profits far into the future.
Major Central Bank Decisions Ahead
Markets face a busy week for global monetary policy.
The Federal Reserve is scheduled to announce its decision on Wednesday.
The Bank of England follows on Thursday, while the Bank of Japan is due to meet on Friday.
The three decisions could significantly influence expectations for interest rates during the final months of the year.
Australia, China and Singapore Trade Mixed
Elsewhere in the region, Australia’s S&P/ASX 200 was little changed near 8,741.
FleetPartners shares jumped around 12% as a bidding battle for the vehicle-leasing company continued.
New Zealand’s NZX 50 gained around 0.4%.
Singapore’s Straits Times index edged approximately 0.1% higher.
In China, the CSI 300 fell around 0.3%, while the Shanghai Composite gained approximately 0.2%.
Indian stock markets were closed for a public holiday.
Asian Markets Face Multiple Risks
Asian markets are currently being pressured by several major themes at the same time.
Investors are questioning whether the AI spending boom can continue at its current pace, while higher oil prices are creating renewed inflation concerns.
At the same time, central banks are preparing for a series of important policy decisions.
For now, Asian stocks are likely to remain sensitive to developments in artificial intelligence, oil markets and interest rate expectations.
