AI shares fall after short-seller attack on

April 5 (Reuters) – Artificial intelligence (AI) shares fell on Wednesday after a short seller alleged accounting problems at retail chain Inc ( AI.N ), dampening investor interest in the group of small companies that have far outperformed market this year. was down 1[ads1]2%, and the stock was also trending on investor-focused social media platform Security firm Guardforce AI ( GFAI.O ) fell more than 18%, while data analytics firm ( BBAI.N ) lost 16% and conversation intelligence company SoundHound AI ( SOUN.O ) was down 9%. shed a quarter of its value on Tuesday, cutting its market cap to $2.80 billion, after Kerrisdale Capital said the firm has “serious accounting and disclosure issues” in a letter to auditor Deloitte & Touche LLP.

Kerrisdale had disclosed his short position in last month, accusing the company of “poor customer engagement, failing sales partnerships and financial pressure.”

The AI ​​company denied the allegations in an emailed response to Reuters.

Canaccord Genuity analyst Kingsley Crane said “there is no evidence of any real wrongdoing or fraud in the short seller report, but it does raise some concerns and investors could benefit from more clarity.”

“It is not necessarily a systemic risk and should not affect other AI stocks in the short term. These stocks are trading on (AI) excitement.”’s stock has more than doubled in value this year thanks to a wave of investor interest in AI-related companies following the viral success of OpenAI’s ChatGPT. That compares with a 6.8% rise in the benchmark S&P 500 (.SPX).

However, the rally has slowed in recent days as concerns grow over the use of artificial intelligence and countries move to regulate the applications.

On Tuesday, US President Joe Biden said it remains to be seen whether AI is dangerous, but stressed that technology companies have a responsibility to ensure their products are safe before they are released to the public.

Reporting by Tiyashi Datta and Yuvraj Malik in Bengaluru; Editing by Anil D’Silva and Shailesh Kuber

Our standards: Thomson Reuters Trust Principles.

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