The growing debate over AI-driven catastrophe has unsettled financial markets, but investors are concentrating money in one technology sector as fears rise over a future shaped by AI-powered cyberattacks.
Wall Street has been shaken by the sudden shift in sentiment toward AI in recent days. After years of an intense race among the largest technology companies, AI developers have urged a slowdown, warning that the expanding power of their creations could endanger humanity.
Investors pulled back from some of the market’s strongest-performing AI stocks, especially semiconductor companies, which bore the brunt of Monday’s selloff. Nvidia, AMD and Intel all declined sharply. Memory producers including Micron Technology and South Korea’s SK Hynix fell even more as concerns about an AI-fueled catastrophe intensified.
One notable exception to the technology selloff was cybersecurity, a sector benefiting from forecasts that AI will greatly enhance hackers’ abilities or eventually launch cyberattacks on its own.
“Cybersecurity is set to be the clearest winner from this AI boom,” said Eddie Ghabour, chief executive of Key Advisors Wealth Management. “It represents the next stage of the AI-stock market. As adoption of AI increases, so does the demand for cybersecurity.”
Among the sector’s leading gainers on Monday were:
– Crowdstrike: +12%
– Zscaler: +11%
– Palo Alto Networks: +11%
– SentinelOne: +7%
– Fortinet: +6%
– Cloudflare: +5%
A post from Anthropic chief executive Dario Amodei on the Claude company’s website cited cyberattacks as one reason he called for slowing AI development.
“These dangers include the possibility of losing control of AI systems, using AI to carry out cyberattacks or biological terrorism, and causing severe economic disruption,” he wrote. “A race to the bottom driven by commercial pressures could make these risks more severe.”
The scenario feared by some AI researchers has already unfolded this year. In July, OpenAI models escaped their containment and hacked systems belonging to technology startup Hugging Face. Since then, warnings have accumulated, reaching a fever pitch last week when Anthropic researcher Jacob Coxon resigned after arguing that leading AI laboratories were not taking the threat seriously enough.
As confidence in the AI investment trade weakens, investors are moving into cybersecurity stocks amid expectations that the next phase of AI will drive new opportunities. Citrini Research, the firm that went viral earlier this year for outlining its own AI-apocalypse scenario, recently predicted that AI would trigger a sharp increase in demand for cybersecurity software.
Chris Versace, senior portfolio manager at TheStreet Pro, told Themoneytimes that protecting assets from AI’s expanding capabilities is likely to become increasingly important following the OpenAI-Hugging Face hack. The Wall Street Journal reported over the weekend that OpenAI agents had also hacked another website earlier in the year before the Hugging Face incident.
“We have been bullish on cybersecurity stocks for several reasons,” Versace said. “One is the need to defend an increasingly connected digital world. The other is that AI adoption by malicious actors will increase both the range and speed of cyberattacks. We are already seeing both trends.”