Moody's Analytics chief economist Mark Zandi, who previously warned of a potential US recession, has issued a new alert regarding the White House's abrupt restrictions on Anthropic's frontier AI models. Zandi described the move as a hidden economic threat that could undermine investor optimism and destabilize the stock market and broader economy.
Zandi's Warning on Social Media
In a post on X (formerly Twitter), Zandi stated that the government's actions pose a "massive threat to that optimism, and by extension, the stock market and economy." He acknowledged that enthusiasm over AI's potential is justified but emphasized that "the cautious kind seems wisest." According to Zandi, the abrupt shutdown of Anthropic's models highlights the vulnerability of markets to regulatory shocks, especially when investor sentiment is running high.
Details of the Post
Zandi wrote: "It's tough to ignore the seeming tension that on the same day (last Friday) that SpaceX went public, the U.S. government slapped export controls on Anthropic's Mythos and Fable LLMs. The SpaceX IPO is the largest in history, by 3x, and embodies the runaway optimism over AI's prospects. However, the government's move on Anthropic, forcing the company to pull the leading-edge LLMs from use, highlights a massive threat to that optimism, and by extension, the stock market and economy. It is hard to imagine that the USG won't quickly come to terms with Anthropic on the use of these LLMs, but it is equally hard to imagine there won't be lots more government restrictions on AI's use coming soon. Optimism over AI is warranted, but the cautious kind seems wisest."
Anthropic Models Taken Offline
On Friday, June 12, AI company Anthropic was instructed by the Trump administration to roll back the release of its most advanced AI models, including Fable 5 and Mythos. According to an Axios report, the administration cited a "national security threat" as the reason for the request. Anthropic received a call at 1 pm ET, giving the company just 90 minutes to comply before new licensing controls would be imposed.
Anthropic had previously worked with the government on pre-release testing of Fable and received explicit approval to deploy the model. However, the sudden reversal left executives scrambling. "We immediately sought to understand the specific nature of the threat so we could remediate it," an Anthropic source said, though officials held firm on the demand. By 5:30 pm ET, the Commerce Department issued a letter imposing restrictions on where the models could be used and by whom.
Collision with SpaceX IPO
The crackdown coincided with the historic SpaceX IPO, which Zandi described as "the largest in history, by 3x." Shares of SpaceX (SPCX) opened at $150, an 11.1% premium to the IPO price, and closed nearly 20% higher at $160.95, pushing its market valuation past $2 trillion. The juxtaposition of regulatory restraint on AI and unbridled investor enthusiasm for space exploration highlights the growing tension between Silicon Valley's commercial expansion and state control.
This article was originally published by the TOI Tech Desk, a dedicated team of journalists committed to delivering the latest and most relevant technology news to readers of The Times of India.
