Major Shakeup In Artificial Intelligence Amid Safety Concerns

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September 14th, 2026, Monday, good morning. Market's got a little bit of everything for everyone today, with a bit of a wrench being thrown into the momentum trade. The S&P 500's down one half of 1% The Dow Jones Industrial Average is down one fifth of 1% The NASDAQ is down 90 basis points. Russell 2000 is down one half of 1%. The four major averages, all underperforming, but nothing shocking.

The VIX sits up 10% today. That's a big move up, sitting at 1763 reading, starting to move towards getting a little anxious, not quite yet. Gold trading down about 2% down $92 to $43.16 an ounce. Crude oil up $4, up 4% to $104 a barrel. I think one of the bigger stories of the day, and we're going to hear about this all day long on CNBC and Bloomberg Television, is that the 10-year treasury note has made a move. Sitting at 4.98, but hitting the five handle earlier this morning, the big question is when does it stick there, and if it sticks there.

Oils back above $100 a barrel. The closure of the Saudi Arabia's East-West pipeline and reports that talks between Iran and the Gulf Cooperation Council members have been postponed. Big issue for stocks today is artificial intelligence. Several AI leaders including Anthropics CEO Dario Emodi, OpenAI CEO Sam Altman and Elon Musk are raising concerns about how quickly these models are advancing and whether humans can fully understand or control what they're learning and doing. It's fair to say that has put a serious wrench in the AI momentum trade. Hyperscalers, semiconductor companies and data center stocks all under pressure. Rates, the interest rates are gonna be a major focus this week. With decisions expected from the Federal Reserve, Bank of England and Bank of Japan, the Fed is expected to raise rates by a quarter percentage point into the range of 3.75 to 4%.

So, like I said, we got a little bit of everything. Higher oil, higher rate concerns, questions about whether AI needs to slow down. Growth is great until the people building the growth start warning that it may be moving faster than the safety systems can handle.

For investors, it's a reminder that even the hottest themes in the market can hit a speed bump when a risk moves from the spreadsheet into the real world. It should be noted that there are some winners today based on this fear. I think Gene Munster speaks well for the AI industry. Says we need to put the conversation of an AI slow down into perspective. We've been going at 200 miles an hour, and if everything at Dario recommended comes into play, the speed of AI progress will be dialed back to 195 miles an hour. There's no way these companies are going to measurably back off for two reasons. Number one is the prisoner's dilemma is in play. If one maintains its pace, the others that dial it back will be at a significant advantage. And two, the China US dynamic is real, and at a minimum, the US has to keep pace with China.

The bottom line is we're not changing our enthusiasm around investing in AI. Little will change, and these stocks will rally in the future.

He also went on to say that Anthropic will still have a blockbuster of an IPO, having just reported their second quarter of profitability in a row. So Dan Niles talked a little about the CEO of Anthropic calling for a slowdown to frontier model development over safety concerns. This follows comments along similar lines by CEO of OpenAI to employees last week that if other companies were willing to do the same thing, they would. The fundamental issues that Dan Niles has with this is that foreign adversaries would welcome the US slowing down AI development. And this is an attempt to slow down the open weight development, which would help the market dominance of OpenAI and Anthropic, which are currently in the lead. So he's calling it some fear mongering. Dan Niles also says that he does not see other companies agreeing to anything that slows down progress catching up to these two market leaders. Having said that, I could see third-party evaluators trying to limit liability risk going forward in some sort of executive order from the White House. But Dan Niles says he hopes the longer term result of these actions is broadly distributed personal AI capabilities for all individuals versus having it become concentrated in the hands of a few companies.

Along this vein of the AI competition, after releasing their paid API of MuSpark 1.32 weeks ago with an open weight version is coming later, Meta has launched their own personal AI agent, Muze, with the stock gaining 5%, 3.6 billion daily active users. A hit product could yield large results. Meta is increasingly showing other ways it can monetize their AI capex spend. This could help and should help the stock re-rate from a 17 times PE to a multiple closer to peers in the low 20s. Meta Connect on September 23, 2024 is another potential catalyst, given their leading frontier watermelon should be coming at the latest by October. Apple stock is gaining 4% last week on the product launch of the affordable Duo. Dan Niles is talking about how it's going to provide a personalized AI agent in your pocket with 50% larger screen than a Pro Max. Dan Niles continues to see a big upgrade cycle next year. The change from a 4 inch screen to a 5.5 inch screen with iPhone 6 drove revenue growth from 7% in 2014 to 28% in 2015 The Android ecosystem is a foldable Samsung phone since 2019