London-listed software stocks experienced a boost on Monday, with businesses previously considered vulnerable to artificial intelligence (AI) technology finding some relief. This surge followed calls from major AI companies, including Anthropic, OpenAI, and Elon Musk, to decelerate the development of the most advanced AI models.
Sage's shares climbed by more than five per cent, making it the fastest-rising company among FTSE 100 firms. RELX also saw its stock price increase. This positive movement in London bucked a broader technology sell-off, with the FTSE 100 up approximately 0.6 per cent at 10,717 in early afternoon trading, despite significant declines for AI-linked stocks in Asia and US tech futures.
Investment director at AJ Bell, Russ Mould, noted the contrast, highlighting Sage's rise to the top of the blue-chip index while Polar Capital Technology Trust, a significant investor in AI stocks, fell. Software and IT services stocks have been under pressure since the AI spending boom accelerated last year, as investors questioned the potential impact of rapidly developing AI models on their businesses.
Chris Beauchamp, chief market analyst at IG, described the prospect of an AI slowdown as a "boon" for FTSE software stocks. He indicated that Sage and RELX had been affected by fears that AI would disrupt their operations. However, Matt Britzman, senior equity analyst at Hargreaves Lansdown, cautioned that calls for safer AI might not translate into a sharp drop in investment, noting that slowing a model release for testing differs from reducing investment in building and running AI systems.