AI risks and calls for “slowdown” are heating up, and US cybersecurity stocks have collectively surged

The Zhitong Finance App learned that cybersecurity stocks were generally higher on Monday. Investors' concerns about the harm artificial intelligence may cause to humans are heating up, while some industry leaders are calling for a slowdown in AI development and a shift in funding to cybersecurity and related enterprise software sectors.

In terms of individual stocks, CrowdStrike (CRWD.US) surged more than 11% and Palo Alto Networks (PANW.US) surged more than 10%. Palo Alto CEO Nikesh Arora expressed his opinion on the possible slowdown in AI development, saying that security companies must stand at the “cutting edge”, anticipate various scenarios and build framework solutions to have the opportunity to guarantee future results. Okta (OKTA.US), Netskope (NTSK.US), Rubrik (RBRK.US), Fortinet (FTNT.US), Check Point Software (CHKP.US), and Microsoft (MSFT) also recorded significant gains. Microsoft's cybersecurity business contributed significant revenue.

Evercore ISI analyst Kirk Materne said in a customer report that cybersecurity and infrastructure requirements should be “basically orthogonal” to the pace of development of cutting-edge models. Whether autonomous agents enter the enterprise faster or slower than expected, they still need to be protected, governed, and observed, as well as controlled access to critical enterprise data. Therefore, regardless of the pace of cutting-edge model training, the background of cybersecurity and the structural requirements of some infrastructure companies should be relatively intact.

Materne added that Okta, SailPoint (SAIL.US), Palo Alto Networks, and CrowdStrike should all benefit because identity management remains an enterprise's “top priority”; the latter two, as platform vendors, can provide integrated visibility and response across the broader security stack, and are therefore most likely to capture related expenses over time.

Other enterprise software stocks also rose on Monday, with ServiceNow (NOW.US), IBM (IBM.US), Adobe (ADBE.US), and Salesforce (CRM.US) leading the way. Materne said that as the final pessimistic scenario surrounding AI-driven software disruption continues to ease, Salesforce and ServiceNow may increasingly attract longer-term GARP/value investors.

Last weekend, Anthropic CEO Dario Amodei warned that the AI industry needs to slow down model development to avoid potential disasters. Subsequently, OpenAI CEO Sam Altman said that cutting-edge AI development requires controlling the pace, but it should not be stopped. SpaceX CEO Elon Musk rarely agreed with Amodei and Altman on the issue, but he also said the industry must slow down slightly. Microsoft CEO Satya Nadella joined the discussion, saying that AI development requires a “prudent pace.” The Windows manufacturer also published a draft “Human-Centered AI: Code of Conduct” outlining the expected behaviors and values of its internal MAI series models.

Analysts believe that although disputes over the pace of AI development continue, security, governance, and identity management requirements may continue to support the cybersecurity sector.