Market Reels from Calls to Control AI Development Pace

Over the weekend, Elon Musk, Sam Altman, and Anthropic's CEO unexpectedly stated that the pace of AI development should be slowed. These remarks immediately impacted the futures market and major domestic AI-related stocks, including Samsung Electronics and SK Hynix. This effectively put an unexpected brake on the AI theme, which had been a powerful driving force in the market.

In a declining market like the present, it's crucial to be wary of FOMO (Fear Of Missing Out). Attempting to chase buys aggressively when stock prices plummet is risky and can lead to greater losses. For investors who are already in a losing position, instead of cutting losses impulsively, a strategy of holding cash and waiting for the market to recover is necessary.

Requests for specific purchase prices of certain stocks can undermine investment autonomy and greatly risk leading to 'all-in' investments. Investing solely based on simple price information, like in 'leading rooms,' should be avoided. It is crucial for investors to set their own criteria and approach with caution.

Market anxiety was detected starting last Friday, and coupled with the AI development speed control issue that followed on Monday, it could cause even greater volatility. Investors need to closely monitor the interest rate announcement results and respond cautiously.

Investments are more likely to succeed when they go against the crowd's sentiment. Recognize yourself as an 'human indicator' and be wary that the strongest urge to invest is often the most dangerous time. True buying opportunities arise when everyone wants to sell or when pessimistic outlooks dominate the market.

If stock prices have already fallen from a high point and you're experiencing losses, selling now to confirm those losses is not a good strategy. Instead of selling immediately, it's wiser to maintain your portfolio and wait for the market to recover. Investors who bought during an overshooting phase should be especially cautious.

As seen in the SK Hynix case, chasing buys at high points when stock prices surge carries significant risk. In your next investment, be careful never to buy at the top. If you're already caught at a high point, patience is needed to hold and observe market conditions rather than confirming losses.

Some analysts suggest that companies ahead in technological competition intend to 'kick the ladder away' to curb latecomers. However, the overarching trend of AI technological advancement cannot be resisted, and there is a high possibility of a rapid recovery after short-term issues. The long-term trend of AI dominance will remain unchanged.

Parallel development of open-source and closed-source models is expected, and the establishment of proprietary AI learning loops by each company will become crucial.

Bargain buying is not simply based on the conviction that prices will fall to a specific level. Instead, it's crucial to enter at an attractive price point where it psychologically feels like 'it has fallen enough.' A contrarian strategy is needed: stockpile cash in preparation for further declines and act decisively when investment sentiment is extremely depressed.

Major AI companies like JPU are rapidly depleting cash, and despite increasing annual recurring revenue, it's not enough to offset the burn rate. This implies a continuous need for additional funding even after listing. Furthermore, with the increasing entry of AI-related companies into the IPO market, concerns about market oversaturation are growing.

This positions it in opposition to the closed-source AI ecosystem led by the United States. The issue of AI governance is now emerging as a new battleground in the US-China rivalry, and the technological hegemony competition between the two nations is expected to intensify. Geopolitical tensions surrounding AI technical standards and application methods are escalating.

For the first time in seven years, China's President visited India, sending positive signals for improving bilateral relations. The Chinese President emphasized that the two nations are partners, not competitors, expressing a willingness to cooperate. This is analyzed as a result of both countries feeling the need for mutual cooperation amidst economic and political pressure from the United States. Despite border disputes, economic necessity is a key background for attempting to improve relations.

Next January, approximately 178 million shares, or 35% of an AI company's total equity, are scheduled to be unlocked. This raises 'overhang' concerns that a large volume of shares could hit the market as existing investors become able to sell their holdings. Uncertainty over whether the commitment to hold shares, made last July, will actually be maintained is increasing investor caution. A large-scale share unlock could put downward pressure on stock prices.

Following Anthropic CEO Dario Amodei's warning about the pace of AI development, Sam Altman and Elon Musk also expressed agreement. This movement even raises the possibility that OpenAI's IPO plans for this year might be withdrawn. These remarks from AI giants pose fundamental questions about the technology's ethical issues and the market's growth speed. Discussions about the pace of growth in the AI industry are expected to continue for some time.

A majority of economists almost entirely agree on the likelihood of the Fed raising interest rates. Similar to the 98% probability reflected for the Bank of Japan's rate decision, the Fed's rate decision scheduled for this week is also expected to significantly impact the market. The market is currently largely factoring in expectations for an interest rate hike and could show significant volatility depending on the actual outcome. Investors should meticulously analyze the Fed's announcement.

The market generally favors a single hike followed by a pause in the short term. However, the Fed's decision could change depending on inflation trends and economic indicators, which would significantly impact the market. Attention will be paid to whether the uncertainty regarding the interest rate hike cycle will be resolved with the Fed's announcement. Investors should consider both scenarios when formulating their strategies.

JPMorgan expressed a hawkish view, anticipating rate hikes in both September and December. Citi, on the other hand, projected a September hike could be followed by rate cuts in the middle of next year. This suggests that the previously optimistic market outlook is gradually shifting to a more realistic, or even pessimistic, perspective. These changed forecasts from various banks will be important considerations for investment strategy formulation. Investors should comprehensively analyze the views of diverse investment banks.

This is because the business visibility of the upstream sector is clearer. Particularly, the semiconductor and memory segments, as essential elements for AI development, show high contribution and are favored by investors. In contrast, downstream segments like humanoids are still in early development stages, making them relatively higher-risk investments. Therefore, investors are focusing on the robust growth potential of the upstream sector.

An analysis suggests that the Fed's decision to raise interest rates is unlikely to be a one-time measure. According to Bill Dudley, a 25 basis point (bp) hike does not significantly impact the economy, so the Fed typically moves in several increments. The market is anticipating hikes within a 75 bp range, which could be flexibly adjusted according to economic data flows. In other words, the Fed's interest rate policy is likely to be a continuous process, not just a short-term judgment, considering structural factors and overall economic conditions.