Global market wrap: Asian stocks weaken on calls of AI slowdown; SoftBank sinks 13%

We are back with quick updates on global developments around stock markets, commodities and companies that you should not miss today.

After a tough week, Asian stocks continued to drag on Monday as oil prices rose further and tech stocks weakened on growing calls of slowdown in the pace of artificial intelligence (AI) development.

South Korea’s Kospi index sank 2.6% to 6,727 on Monday, while Japan’s Nikkei index tumbled 1% to 63,386.

The remaining markets were trading largely flat to mildly positive. China’s Shanghai Composite index was trading higher by just around 0.2% at 3,894, while Hong Kong’s Hang Seng Index rose 0.3% to 24,893.

Australia’s S&P/ASX 200 was trading flat at 8,748 on Monday, while Singapore’s Straits Times inched up 0.1% to 5,704.

US stock futures dropped on Monday anticipating a major shakeup in the AI story. S&P 500 futures dropped 0.5%, futures tied to the Dow inched down 0.1%, while Nasdaq 100 futures declined 1.3% as tech stocks faced the heat.

On Friday, the S&P 500 had closed higher by 0.9%, while the Nasdaq Composite and the Dow Jones Industrial Average had jumped 1% each as oil prices retreated.

However, oil resumed its rally on Monday on reports that a vessel was struck in the Strait of Hormuz as direct negotiations between the US and Iran appeared no nearer to resuming.

On Monday, the US crude oil futures for October delivery gained 2.6% to $102.66 per barrel at 0031 EDT, while Brent futures for November delivery jumped 2.6% to $107.35 per barrel.

Gold prices slipped on Monday after higher-than-expected US inflation data raised prospects of a rate hike by the US Federal Reserve this week.

While US gold futures for ​December delivery slipped 1% to $4,367 per ounce, spot gold shed 0.5% to $4,328 per ounce by 0431 GMT.

Here’s a look at the other key developments of the day:

Larry Ellison nixes plan to offload up to $7.5 billion worth of Oracle stock

Larry Ellison has cancelled his plan to sell up to 50 million of his shares in Oracle, or $7.5 billion worth of stock at the current price.

The cancellation came a day after Oracle disclosed in a regulatory filing a trading plan for its founder to sell shares. The plan was adopted on June 22 and was set to end on October 24.

Ellison, 82, has held onto a substantial portion of the company that he founded in 1977. He reportedly continues to control more than 40% of Oracle.

OpenAI rules out IPO this year

OpenAI CEO Sam Altman said over the weekend that his company will not go public this year, citing growing concerns about AI safety.

Altman in an interview said that an IPO now would be “ill-advised”. The decision pushes one of the most anticipated IPOs until at least 2027.

Altman’s comments came on the same day that Anthropic CEO Dario Amodei published an essay urging AI companies to slow how quickly they improve their most advanced models.

SoftBank shares tumble 13% after AI chiefs call for slowdown

SoftBank Group Corp.’s shares slid the most in nearly three months after the heads of Anthropic and OpenAI called on developers to tap the brakes on AI development for safety reasons.

The stock dived as much as 13% on Monday on the Tokyo Stock Exchange. Notably, SoftBank is reportedly among the biggest backers of OpenAI, with its total investment in the ChatGPT maker expected to reach close to $65 billion by October.

Investors questioned the kind of returns SoftBank could generate from its huge investments in the AI infrastructure after OpenAI CEO Sam Altman declared it would not go public this year. Even Anthropic CEO Dario Amodei said over the weekend that AI companies need to slow the pace of innovation for their best models due to safety risks.

Anthropic says it will post second straight quarterly profit

Claude maker Anthropic has told a small group of shareholders that it expects to report a positive adjusted operating income for a second consecutive quarter, according to a report.

The measure excludes costs including stock-based compensation, according to the report.

Anthropic’s gross margins are above 80% before accounting for revenue shared with distribution partners such as Amazon and the cost of training its AI models, the report added.

Z.ai shares decline over 10% after $5 billion fundraising

Shares of Beijing-based artificial intelligence company Z.ai declined over 10% on the Hong Kong Stock Exchange after the company raised a total of $5 billion (HK$39 billion) from a share placement of about $2 billion and a concurrent convertible bond sale of about $3 billion.

Z.ai launched the sales on Friday, offering 21.97 million new Hong Kong shares at HK$714 each, a 10% discount to Friday’s closing price of HK$793.

The company also raised 20.14 billion yuan (HK$23.55 billion) of zero-coupon bonds due in September 2027, the filing showed. The yuan-denominated bonds will be settled in US dollars. The bonds were issued at 100.5% of their face value, the filing showed. The initial conversion price is HK$892.50, a 25% premium to the HK$714 share placement price.