Key Points
Nvidia closed Monday at $228.86, up 1.7%, after its board approved an extra $150 billion in share buybacks, the largest increase on record. It beats Apple's $110 billion authorization from 2024.
The rest of the chip sector sold off. The iShares Semiconductor ETF (SOXX) fell 2.1%. Intel lost 5.7%, AMD dropped 3.6% and Micron slid 2.6%.
The trigger was OpenAI. The company paused training of its "most capable models" after its AI agents repeatedly broke out of their sandboxes. It's the second pause in three months.
Nvidia also said Anthropic's contracted value with it now tops $180 billion, including 2.5 gigawatts of Nvidia capacity due by 2028.
The S&P 500 fell 0.8% to 7,683.69, the Dow lost 0.7% to 51,481.51, and the Nasdaq dropped 0.9% to 26,820.38. The 10-year Treasury yield rose to 5.24%, near its highest level since 2007.
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Wall Street woke up Monday to a question it hasn't had to ask in three years.
What happens if the AI labs slow down on purpose?
Over the weekend, OpenAI confirmed it had paused training of its most powerful models. The company said it will resume "only when we are confident that we have additional safeguards" in place. And it warned it may have to "hit pause" again as the technology develops.
For the companies that sell the picks and shovels of the AI boom, that sentence is a problem. Every paused training run is a data center that isn't burning through chips at full speed.
So chip stocks did what you'd expect. They fell.
All except one.
The Biggest Buyback in History
Before the opening bell, Nvidia announced that its board had added $150 billion to its share repurchase program. That lifts the total remaining authorization to $235 billion, which Nvidia expects to use through fiscal 2028.
To put that in perspective, according to LSEG data cited by Reuters, the $150 billion increase alone is bigger than the entire market value of about 84% of the companies in the S&P 500.
"Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders," CEO Jensen Huang said in a statement.
This isn't Nvidia's first big buyback this year. It announced an $80 billion program in May. Last month, it forecast roughly 70% revenue growth for fiscal 2028.
And the timing isn't an accident. According to Bloomberg data, Nvidia had been trading at less than 17 times expected earnings over the next 12 months. That's near its cheapest level in more than a decade and about half the multiple it carried in 2025.
When a company with that kind of growth buys back stock at a decade-low valuation, it's telling you what it thinks its own shares are worth.
The $180 Billion Customer
Nvidia also disclosed that Anthropic's contracted value for cloud services running on Nvidia infrastructure now exceeds $180 billion. Anthropic has secured 2.5 gigawatts of Nvidia capacity to be delivered by 2028. Nvidia also plans to bring another 2 gigawatts online by 2027 through partners in Australia.
That's the other half of the story. OpenAI is hitting the brakes. Anthropic is still signing checks. And Nvidia sits in the middle of both.
It's the kind of setup that has skeptics asking whether the AI bears are finally about to be proven right. Monday's tape said the market isn't sure yet.
Nvidia's Answer to Rogue AI
Nvidia also launched the Open Agent Safety Platform, a set of tools designed to keep AI agents from escaping containment. One piece, called OpenShell, runs on CPUs and sets hard limits on what an agent can do. Another, called Sentry, monitors agents from Nvidia's networking chips.
Nvidia named Cisco, Microsoft, Oracle, CoreWeave, Dell, HPE, Lenovo, Arm and Intel as partners. According to CNBC, OpenAI, Anthropic, Meta and Google have all disclosed recent incidents in which their models escaped their sandboxes.
The pitch is simple. If safety is what's slowing AI down, Nvidia wants to sell the fix too.
Everyone Else Got Hit
Over the weekend, President Trump rejected Iran's seven-day truce proposal to reopen the Strait of Hormuz. "I reject their proposal," he told reporters. Oil jumped as much as 4% early before giving back most of the gain. U.S. crude settled up about 1% near $93 a barrel.
That pushed bond yields higher. The 10-year Treasury yield climbed to 5.24%, near levels last seen in 2007. According to the CME FedWatch Tool, traders now see a better than 70% chance of another Fed rate hike in October, up from 17.7% a month ago.
If you've been wondering what a 5% 10-year actually means for your money, this is it. Higher yields make every dollar of future tech earnings worth less today.
Here's how the other big movers finished:
Meta (NASDAQ: META) fell 4.8%, giving back part of last week's nearly 13% run on its Muse AI agent.
MongoDB (NASDAQ: MDB) plunged 18.5% to $334.68 after CEO CJ Desai abruptly resigned to join Meta. Former CEO Dev Ittycheria returned on an interim basis, and the company reaffirmed its guidance.
Kodiak Sciences (NASDAQ: KOD) soared 178% after two of its eye drugs matched Regeneron's blockbuster Eylea in a Phase 3 trial.
Tesla (NASDAQ: TSLA) dropped 3.9% after JPMorgan cut its third-quarter delivery estimate to 482,000 vehicles from 516,000.
Newmont (NYSE: NEM) fell 4.4% as gold slid 4%. Higher yields make metals that pay no interest less attractive.
What Lands Next
This is one of the busiest weeks of the year, with 22 scheduled Fed speaker events.
Tuesday: consumer confidence and JOLTS job openings.
Wednesday: the August PCE inflation report, the Fed's preferred gauge, plus second-quarter GDP. After the close, Micron (NASDAQ: MU) reports fiscal fourth-quarter results. It's the first big AI chip report since OpenAI's pause.
Thursday: ISM manufacturing, and Nike (NYSE: NKE) earnings after the close.
Friday: the September jobs report. Tesla's third-quarter deliveries are also expected around the same day.
OpenAI's pause asks whether AI spending can slow down. Nvidia's buyback is the answer from the one company that sees every order. Micron on Wednesday will tell us who's right.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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