Moonshot AI unveils Kimi K3 open-source model as US stocks decline amid growing concerns over artificial intelligence spending.

US stocks fell on Friday as the release of a powerful new open AI model from Chinese startup Moonshot AI intensified concerns regarding the sustainability of the current artificial intelligence spending spree. The Nasdaq Composite dropped 1.4%, the S&P 500 declined 1%, and the Dow Jones Industrial Average fell 0.7%. The Moonshot AI Kimi K3 model is the world's largest open-source model, rivaling top US models like Anthropic's Claude. This development has rattled investors who worry that open-source competition may impact the revenue of US companies and the chipmakers providing the necessary infrastructure. Consequently, the PHLX Semiconductor Index entered a bear market, with major players like Nvidia and Intel seeing significant share price declines. While tech stocks faced pressure, oil futures rose nearly 5% due to US attacks on Iran, sparking new inflation fears. Despite the recent sell-off, analysts suggest the decline may be a result of profit-taking after a prolonged rally, noting that the long-term trajectory for American AI earnings remains positive.

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