Palantir Technologies and Nvidia are restricting the data fed into their artificial intelligence models, according to a report in The Information. Nvidia's stock fell 3.4 percent to $210.96 on significant volume, while the Nasdaq Composite dropped 0.6 percent to $26,186.
The companies are limiting the scope of data used for training advanced AI models to mitigate potential intellectual property infringement and protect sensitive client data. Such restrictions could substantially increase operational costs and complexity for future AI model development.
Investors have priced in substantial future productivity gains from AI innovation, underpinning high valuations across the technology sector. The data restrictions introduce concrete uncertainty to long-duration growth assets. Repricing of future cash flows could compress valuations for companies reliant on extensive, diverse datasets for AI model training, directly impacting duration risk profiles.
A slowdown in AI-driven productivity gains could temper long-term economic growth expectations. This scenario might ease pressure on long-term Treasury yields if the Federal Reserve maintains steady short-term rates, potentially steepening the curve as front-end rates remain firm. Corporate bond spreads for technology firms could widen as perceived operational and innovation risks increase, reflecting higher credit risk premiums.
Palantir is scheduled to report third-quarter earnings on November 14. Nvidia's next earnings call is set for November 20. Both calls will likely field investor questions regarding AI data strategy and its impact on development roadmaps and financial guidance.
