Karpathy joins Anthropic as tech stocks face pressure ahead of Nvidia earnings
Investors weigh inflation concerns and chip competition as Andrej Karpathy’s departure from OpenAI highlights intensifying talent wars in the artificial intelligence sector.
Tech stocks faced renewed pressure on Tuesday as investors adopted a cautious stance amid persistent inflation concerns and awaited the first-quarter earnings report from Nvidia. The broader technology sector retreated, with the Tech-Software Sector ETF and the Philadelphia Semiconductor Sector Index both posting losses. High-flying chipmakers such as Micron and SanDisk have seen their shares decline over the past five days, while the so-called Magnificent Seven stocks, including Amazon and Tesla, also came under selling pressure.
In a significant personnel shift within the artificial intelligence industry, Andrej Karpathy, co-founder of OpenAI and former head of artificial intelligence at Tesla, announced his departure to join rival laboratory Anthropic. Karpathy shared the news on social media, stating that the coming years at the frontier of large language models would be formative. His move follows a tenure at Tesla where he led artificial intelligence and autopilot vision efforts, before returning to OpenAI and subsequently leaving again.
The talent migration occurs as competition for AI infrastructure and computing power intensifies. Google and Blackstone announced a joint venture to launch an AI cloud company, with Blackstone making an initial $5 billion equity investment. The venture will provide data centre capacity and Google Cloud’s Tensor Processing Units as a compute-as-a-service offering, signalling how hard assets powering artificial intelligence are becoming attractive to financial investors. Blackstone expects the first 500 megawatts of power to come online by 2027.
Market attention is also focused on potential supply chain disruptions at Samsung Electronics. The company and its labour union are engaged in government-mediated talks to avert an 18-day strike starting May 21. The dispute centres on bonus allocations, with workers seeking a 15 per cent share of expected $200 billion in operating profits. A strike at the world’s largest memory chip manufacturer could cause significant disruption to global supply chains and South Korea’s economy, with the prime minister warning of emergency arbitration if an agreement is not reached.
Meanwhile, legal developments involving OpenAI concluded with a federal jury unanimously rejecting Elon Musk’s $150 billion lawsuit against the company and its leaders. The jury ruled that the claims were barred by the statute of limitations, and a federal judge approved the verdict, bringing the case to a close. As Nvidia prepares to report earnings on May 20, investors are also monitoring rising competition in the chip sector, including the recent initial public offering of Cerebras and Amazon’s growing internal chip business, which now boasts an annual revenue run rate exceeding $20 billion.
