Shares of the artificial intelligence cloud provider Oracle (NYSE: ORCL) slid this morning after a report over the weekend showed that co-founder Larry Ellison was abandoning plans to sell up to $7.5 billion worth of Oracle stock. That sort of news would typically cause a share price rally, but Ellison's move came as investors sold some AI stocks today, amid calls from Anthropic and OpenAI for more artificial intelligence regulation. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Adding to investor pessimism today is the growing belief among investors that the Federal Reserve may hike rates at its next meeting.
That could make Oracle's current AI spending even more expensive than it already is. Oracle stock was down by 4.5% as of 11:04 am ET. The first piece of news Oracle investors were processing this morning was that Ellison changed his mind about selling up to 50 million shares of the company, a plan that had originally been set in motion in June.
Ellison controls about 40% of Oracle, so his stock sales are watched very closely. And, usually, a reversal on selling such a large number of shares would give the stock a boost. But that didn't happen, likely because investors paired the news with a broader pullback in AI stocks today.
Warnings of misaligned AI systems recently compelled leaders at Anthropic and OpenAI to call for increased government regulation of the industry. Anthropic CEO Dario Amodei also urged AI companies, including his own, to slow down their pace of AI model development. OpenAI CEO Sam Altman welcomed the potential slowdown and also said over the weekend that OpenAI wouldn't go public until next year, noting that there needs to be more focus on AI safety right now.
That sent many AI stocks tumbling, including Oracle's shares. An inflation report released last week showed that wholesale prices continued climbing higher in August. That news came as oil prices continued rising because of the war in Iran.
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