AI's safety slowdown spooks the market, delays IPOs, and hands incumbents more room to run

Dario Amodei, CEO and co-founder of Anthropic.

In recent days, CEOs of leading technology companies endorsed a call for slowing down the pace of AI development alongside a coordinated effort to safeguard their models against misuse. The announcements, made in response to rising security concerns, have introduced uncertainty into the capex spending cycle, leading to a sell-off in AI-related stocks on Monday.

Below, our analysts offer perspectives on how this could affect current private market trends.

A marketing tactic with no long-term bite

Dimitri Zabelin, Senior Research Analyst

Heading further into Q3, we could see investor optimism and appetite briefly wilt, but a fundraising freeze in Q4 is unlikely. More likely are elongated timelines between funding rounds as VCs and PEs re-evaluate the longer-term implications of these announcements. Longer term, the fundamental, secular story of the multi-trillion-dollar AI buildout has not been derailed.

The recent calls for AI safety from OpenAI , Anthropic and others are tactical market strategies, not genuine altruistic gestures. The calls for external auditors and a slowdown appear like a classic case of pulling up the ladder from beneath them. Adding regulatory complexities and costs can create a massive legal barrier to entry. Smaller, open-source developers looking to disrupt the software hegemons will have to stomach higher costs and divert more resources to compliance than R&D. Self-imposed regulation satiates the growing public appetite for government-led policies, while President Trump has made it clear he is uninterested in a legislative approach.

These announcements have the same look and feel as recent marketing tactics by leading LLM developers to publicly warn that their model is too powerful, effectively driving up more interest in it. Anthropic and OpenAI have repeatedly issued public warnings about the risks posed by their most advanced models. These tactics amplify the hype around frontier models and the atmosphere-piercing valuations they are assigned.

Kyle Stanford, Director of US VC Research

With the recent escalation in Iran driving up oil prices, inflation and interest-rate-hike expectations, hopes for a renewed exit cycle were already dimming. OpenAI has already stated that it wouldn't IPO this year, and news that AI leaders might self-impose growth restrictions is likely to reinforce expectations for longer exit timelines, putting more pressure on an already-strained LP base.