Chip firms fall in US and Asia as AI jitters rattle investors
Shares of major chip companies fell sharply in the US and Asia as the sell-off in artificial intelligence-related stocks deepened.
Trading in South Korea’s benchmark Kospi index was temporarily halted after falling 8% on Tuesday morning. It fell further, trading nearly 10% lower after the 20-minute halt was lifted.
Technology companies led the collapse; Samsung Electronics and SK Hynix both fell more than 10%.
This comes after AI chip giant Nvidia fell 5% in New York on Monday; This means it has lost its position as the world’s most valuable listed company to Apple.
The tech-heavy Kospi has been halted eight times so far this year due to a stock market mechanism known as a circuit breaker designed to calm panic selling.
The index more than doubled from the beginning of the year to mid-June but has lost about a third of its value since then.
In recent months, stock market transactions have been particularly volatile in South Korea, which has attracted the attention of many retail investors.
U.S.-listed SK Hynix shares fell 7.5% on Monday, falling well below the $149 offering price at which it made a record-breaking debut on Nasdaq on July 9.
Japan’s Nikkei 225 index, which is also dominated by technology companies, fell almost 4.5% on Tuesday morning.
Nvidia shares fell Monday after the Wall Street Journal reported that it was in talks to provide nearly $250 billion for OpenAI as part of a major data center project.
The BBC has contacted Nvidia and OpenAI for comment.
The decline allowed Apple to overtake Nvidia as the world’s most valuable company after the iPhone maker rose nearly 25% this year.
As governments and companies spend hundreds of billions of dollars developing AI capabilities, some analysts question whether the technology can be profitable enough to recoup such large investments.
