Business
Dominant AI trade confronts test as bellwether Nvidia reports earnings
NEW YORK (Reuters) -The artificial intelligence theme that has propelled markets over the past couple years faces a crucial moment on Wednesday, when bellwether Nvidia Corp reports its second-quarter results.
Technology shares, including a number of signature stocks in the AI trade, have wobbled this month with investors pointing to some signs of caution emerging in the AI industry.
The declines have taken some of the steam out of an array of tech and other stocks that have sizzled since chatbot ChatGPT unleashed a frenzy over the potential for AI about three years ago.
An equal-weighted basket of 50 AI-related stocks tracked by Bespoke Investment Group — which includes many of the world’s biggest tech companies — has soared nearly 170% since the end of 2022, as of Monday.
“AI is a critical piece of what is driving stocks right now,” said Peter Berezin, chief global strategist at BCA Research.
This year, strong gains for number of heavyweight tech stocks exposed to AI have helped power major equity indexes to record highs.
Semiconductor giant Nvidia has ridden its position as the dominant AI player to become the first company to top $4 trillion in market value last month.
Its more-than 30% gain this year alone has accounted for nearly one quarter of the S&P 500’s 10.4% year-to-date total return as of Monday, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. More broadly, 10 top AI plays have contributed nearly half of the index’s year-to-date return, according to BCA Research.
Shares of data and analytics firm Palantir Technologies, have doubled, while other chipmakers including Broadcom and Advanced Micro Devices have also handily outpaced the broader market.
Earlier in the reporting period, companies such as Microsoft and Google parent Alphabet unveiled significant capital spending, as AI helped results.
AI stock enthusiasm has spread beyond tech and tech-related areas including to utilities and power equipment companies amid spiking energy demand expected to be needed to fuel the technology.
Industrial firm GE Vernova and utilities sector members Constellation Energy and Vistra are among the non-tech stocks that have put up strong gains in the past year, helped by AI excitement.
The AI enthusiasm has helped drive stock valuations well above historical levels. The overall S&P 500’s price-to-earnings ratio, based on expected earnings over the next 12 months, last stood at 22.4 times, according to LSEG Datastream. That is near its highest level in over four years, and some 40% above its long-term average of 15.9.
Tech — which has by far the heaviest weighting in the S&P 500 of the 11 sectors — has seen its forward P/E rise to 29.2, about 36% above its long-term average of 21.4, according to LSEG Datastream.
“There is a risk that we have gotten a little bit ahead of our skis here and that some of the near-term expectations just won’t be realized,” BCA’s Berezin said.
The P/E valuations for both the tech sector and the S&P 500 are still below highs reached during the late 1990s and early 2000s, when many stock prices ran up to exorbitant levels during the dawn of the internet, leading to a steep fall for tech stocks in the ensuing years.
However, investors have pointed to the increasing presence of the tech sector in market indexes as a sign the market may be overly dependent on the performance of the group.
The tech sector comprises slightly over one-third of the overall S&P 500’s market value, not far from the 35% level it reached in March 2000, according to LSEG Datastream.
Meanwhile, the combined market cap of the 10 biggest AI plays, including Nvidia, Broadcom and Microsoft — stood at $18 trillion, BCA said in a note last week. That amounts to about 33% of S&P 500 stock market capitalization, up from around 15% in late 2022, according to BCA.
Market concentration risk is “real and rising,” Anthony Saglimbene, chief market strategist for Ameriprise Financial, said in a note
Nvidia’s “commentary on Wednesday could help set the table for how AI trends develop into year-end and, by extension, for a market now anchored to a small group of very large and influential technology stocks,” Saglimbene said.
(Reporting by Lewis Krauskopf; additional reporting by Lance Tupper; Editing by Alden Bentley and Nick Zieminski)
Business
AI’s Real Danger Is It Doesn’t Care If We Live or Die, Researcher Says

AI researcher Eliezer Yudkowsky doesn’t lose sleep over whether AI models sound “woke” or “reactionary.”
Yudkowsky, the founder of the Machine Intelligence Research Institute, sees the real threat as what happens when engineers create a system that’s vastly more powerful than humans and completely indifferent to our survival.
“If you have something that is very, very powerful and indifferent to you, it tends to wipe you out on purpose or as a side effect,” he said in an episode of The New York Times podcast “Hard Fork” released last Saturday.
Yudkowsky, coauthor of the new book If Anyone Builds It, Everyone Dies, has spent two decades warning that superintelligence poses an existential risk to humanity.
His central claim is that humanity doesn’t have the technology to align such systems with human values.
He described grim scenarios in which a superintelligence might deliberately eliminate humanity to prevent rivals from building competing systems or wipe us out as collateral damage while pursuing its goals.
Yudkowsky pointed to physical limits like Earth’s ability to radiate heat. If AI-driven fusion plants and computing centers expanded unchecked, “the humans get cooked in a very literal sense,” he said.
He dismissed debates over whether chatbots sound as though they are “woke” or have certain political affiliations, calling them distractions: “There’s a core difference between getting things to talk to you a certain way and getting them to act a certain way once they are smarter than you.”
Yudkowsky also brushed off the idea of training advanced systems to behave like mothers — a theory suggested by Geoffrey Hinton, often called the “godfather of AI — arguing it wouldn’t make the technology safer. He argued that such schemes are unrealistic at best.
“We just don’t have the technology to make it be nice,” he said, adding that even if someone devised a “clever scheme” to make a superintelligence love or protect us, hitting “that narrow target will not work on the first try” — and if it fails, “everybody will be dead and we won’t get to try again.”
Critics argue that Yudkowsky’s perspective is overly gloomy, but he pointed to cases of chatbots encouraging users toward self-harm, saying that’s evidence of a system-wide design flaw.
“If a particular AI model ever talks anybody into going insane or committing suicide, all the copies of that model are the same AI,” he said.
Other leaders are sounding alarms, too
Yudkowsky is not the only AI researcher or tech leader to warn that advanced systems could one day annihilate humanity.
In February, Elon Musk told Joe Rogan that he sees “only a 20% chance of annihilation” of AI — a figure he framed as optimistic.
In April, Hinton said in a CBS interview that there was a “10 to 20% chance” that AI could seize control.
A March 2024 report commissioned by the US State Department warned that the rise of artificial general intelligence could bring catastrophic risks up to human extinction, pointing to scenarios ranging from bioweapons and cyberattacks to swarms of autonomous agents.
In June 2024, AI safety researcher Roman Yampolskiy estimated a 99.9% chance of extinction within the next century, arguing that no AI model has ever been fully secure.
Across Silicon Valley, some researchers and entrepreneurs have responded by reshaping their lives — stockpiling food, building bunkers, or spending down retirement savings — in preparation for what they see as a looming AI apocalypse.
Business
Canadian AI company Cohere opens Paris hub to expand EMEA operations – eeNews Europe
Business
OpenAI Foresees Millions of AI Agents Running on the Cloud

OpenAI is betting the future of software engineering on AI agents.
On the “OpenAI Podcast,” which aired on Monday, cofounder and president Greg Brockman and Codex engineering lead Thibault Sottiaux outlined a vision of vast networks of autonomous AI agents supervised by humans but capable of working continuously in the cloud as full-fledged collaborators.
“We have strong conviction that the way that this is headed is large populations of agents somewhere in the cloud that we as humanity, as people, teams, organizations supervise and steer in order to produce great economical value,” Sottiaux said.
“So if we’re going a couple of years from now, this is what it’s going to look like,” Sottiaux added. “It’s millions of agents working in our and companies’ data centers in order to do useful work.”
OpenAI launched GPT-5 Codex on Monday. Unlike earlier iterations, OpenAI said that GPT-5 Codex can run for hours at a time on complex software projects, such as massive code refactorings, while integrating directly with developers’ workflows in cloud environments.
OpenAI CPO Kevin Weil said on tech entrepreneur Azeem Azhar’s podcast “Exponential View” that internal tools like Codex-based code review systems increased efficiency for its engineers.
This doesn’t mean human coders would be rendered obsolete. Despite successful examples of “vibe coding,” it is obvious when a person using the AI agent doesn’t know how to code, engineers and computer science professors previously told Business Insider.
Brockman said that oversight will still be critical as AI agents take on more ambitious roles. OpenAI has been strategizing since 2017 on how humans or even less sophisticated AIs can supervise more powerful AIs, he said, in order to maintain oversight and “be in the driver’s seat.”
“Figuring out this entire system and then making it multi-agent and steerable by individuals, teams, organizations, and aligning that with the whole intent of organizations, this is where it’s headed for me,” said Sottiaux. “It’s a bit nebulous, but it’s also very exciting.”
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