Stock markets: Asia in the red amid concerns over tech shares. Oil prices fall
Uncertainty over OpenAI’s earnings is fuelling concerns about spending on artificial intelligence, triggering falls in Asia and the US, with knock-on effects on oil and government bonds
Key points
Asian stock markets are facing a session of falls, with trading volumes low due to the bank holidays. Speculation over OpenAI’s revenues has reignited fears about the boom in spending on artificial intelligence, weighing on US technology shares. The price of oil is also falling.
Asian indices: Tokyo -1%
The Japanese Nikkei index fell by 1 per cent, with SoftBank Group – an investor in the company behind ChatGPT – down by around 4.4 per cent. The broader MSCI Asia Pacific index fell by 0.2 per cent, whilst the markets in South Korea and Taiwan – regional leaders in the chip sector – remained closed for public holidays.
OpenAI hits Wall Street
The Nasdaq 100 index, which is heavily weighted towards technology stocks, fell by 1.4 per cent, whilst a US index tracking chip manufacturers lost 3.4 per cent following a Financial Times article claiming that OpenAI’s annualised revenues were $20 billion lower than previously indicated. The company is on track to reach around $50 billion, according to sources familiar with the matter. Furthermore, Firmus Grid, an Australian data centre company backed by Nvidia, has scrapped its plans for an IPO.
Oil prices fall
Brent crude fell by 0.6 per cent to around $103.70 a barrel after President Donald Trump stated that the United States would not attack Iran before the mid-term elections in November. US government bonds (Treasuries) held on to their gains from the US trading session, whilst a Bloomberg dollar index remained stable.
Anticipation builds ahead of US quarterly results
Questions surrounding OpenAI’s revenue have fuelled concerns about AI spending, at a time when high financing costs are making it more difficult to justify substantial investment in data centres and computing infrastructure. Next week’s quarterly results will serve as a crucial test: investors will be looking for confirmation that revenue and profits can keep pace with the capital required to develop and operate AI models.
