Citigroup analysts warn that a potential slowdown in AI model development could lead to downward earnings revisions for US companies. This shift threatens the equity market rally that has persisted throughout 2026, which was largely driven by optimism surrounding AI-related growth.
The market reaction followed public statements from OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei on September 13–14. Both leaders advocated for a more measured pace in AI development, introducing uncertainty into a sector that previously priced in relentless technological progress.
Following these comments, shares of companies linked to the AI sector, including Intel and SoftBank, experienced a sell-off. The decline affected various segments of the tech stack, ranging from semiconductor manufacturers providing compute infrastructure to cloud service providers.
Citigroup research covering the period from mid-2025 to 2026 highlights the vulnerability of equity markets to delays in AI productivity gains. Strategists noted that software valuations are particularly at risk of multiple compression if expected AI-augmented growth fails to materialize in corporate bottom lines.
