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Listen to this article in summarized format Shares of South Korean memory maker Samsung Electronics Co. fell as much as 4.1% early Monday while peer SK Hynix Inc. slumped 5.8%, as investors assessed whether the more cautious approach to developing advanced models will crimp their earnings. In Japan, chip equipment maker Advantest Corp. dropped 4.7% while storage maker Kioxia Holdings Corp. slid 9.3%. Calls for restraint have grown in the industry, with Anthropic Chief Executive Officer Dario Amodei saying Saturday that the company would introduce additional safeguards, including independent third-party evaluations, and urged the broader industry to slow the pace of development of their most advanced models. OpenAI CEO Sam Altman backed the proposal, while xAI's Elon Musk said "Dario is right." Read more: Nifty may rebound to 23,800; Rupak De picks Apollo, Laurus Labs and Eternal for the week Still, with demand for chips, energy and computing power continuing to outstrip supply, any weakness in tech harwdare stocks may prove short-lived. Investors including Gary Tan, a portfolio manager at Allspring Global Investments in Singapore, are doubtful the latest developments will have long-lasting effects on the industry. "It may cause some short-term pressure, but it's unlikely to derail the longer-term AI trade," Tan said. "AI development is still at a relatively early stage, and I'm not sure the rest of the ecosystem is willing to accept the current pecking order and slow down while the technology continues to evolve so rapidly." The tech-heavy Nasdaq 100 Stock index has dropped more than 4% from the record notched in June, while futures fell more than 1% in early Asia hours on Monday. Read more: Inside NSE IPO journey: Why India's largest exchange took 10 long years to reach Dalal Street Some investors argue that a slower pace of AI development could ultimately be positive for the industry by giving companies more time to extract returns from infrastructure already being built. "The three CEOs agreeing to pace things does not really change the money being spent on chips, power and infrastructure. In fact, it extends the development timeline," said Billy Leung, an investment strategist at Global X Management in Sydney. "If commercialization and adoption keep growing while the pace of new capability eases off a bit, that actually helps the shift from spending money to build things towards making money from what's already built - e.g., monetization." Sentiment toward Asian tech firms was already being challenged as traders firmed bets of a Federal Reserve rate hike this week and an increase in global borrowing costs this month, threatening to crimp profits. Tech stock valuations may also come under more scrutiny because they assume not only strong demand but a relentless pace of model development, Charu Chanana, chief investment strategist at Saxo Markets in Singapore, said. Still, the souring mood is likely to be short-lived with a push for safeguards leading to more investment in cybersecurity and AI monitoring tools, she said. Memory, networking, cooling and power equipment companies are likely to be protected by projects already in development, Chanana said. “Demand for computing power and AI adoption does not disappear because additional safeguards are introduced,” she said. “For investors, responsible development may make the AI opportunity more durable, even if the pace of progress becomes slightly more measured.” (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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