Shares of Raspberry Pi fell sharply amid growing concerns over artificial intelligence (AI) safety and the prospect of higher interest rates, contributing to a wider downturn in global technology stocks. The London-based low-cost computer maker, which has been a notable beneficiary of the AI expansion through its industrial clients integrating AI systems into manufacturing, saw its shares drop by 93 pence, or 13 percent, to 618½ pence following OpenAI’s announcement that it was pausing the training of its latest AI models. This pause came amid increasing reports of AI agents behaving unpredictably, raising investor worries about the safety and reliability of AI technologies.
The news has raised questions about the future pace of AI infrastructure development, with some market participants suggesting that concerns around AI risks could slow investment in the sector. In addition, the outlook for rising interest rates is placing further pressure on tech stocks. Higher borrowing costs would increase expenses for technology companies, many of which rely on debt to finance growth. Market sentiment currently reflects a 68 percent probability that the U.S. Federal Reserve will implement a rate hike in its upcoming October meeting, with expectations of roughly 90 basis points in total tightening by late 2027. These concerns are exacerbated by geopolitical tensions, notably the conflict in Iran, which is driving up oil prices and contributing to fears of inflation and tighter monetary policy.
Other technology-related shares in London also declined. Chipmaker IQE saw a 3 percent drop to 45 pence, while Ceres Power, which produces solid oxide fuel cells expected to gain demand from rising data centre energy usage, fell 7.2 percent to 387¾ pence. On the FTSE 100 index, Polar Capital Technology Trust, a significant investor in U.S. tech companies, declined 2.2 percent to 684 pence, and Computacenter shares dropped 1.4 percent to £53.30.
The broader impact of the tech sell-off was reflected in the FTSE 100 index, which closed 10.37 points lower, or 0.1 percent, at 10,684.88, despite a strong performance from building sector stocks supported by the government’s new Help to Buy scheme. Contrastingly, the FTSE 250, which is more representative of the domestic economy, posted gains, rising 74.18 points, or 0.31 percent, to 24,335.32.
In other market activity, shares in the publisher Reach increased by 2.2 percent to 45 pence after Heather Venture Holdings, an investment fund controlled by Lord Ashcroft, acquired a 3.1 percent stake in the company valued at approximately £4.45 million. Lord Ashcroft indirectly holds a 75 percent ownership in Heather Venture Holdings.