$900 billion wiped out: Asia turns its back on AI
Tech stocks led a sharp wave of selling across Asia as concerns over inflated valuations of artificial intelligence companies met with rising oil prices and bond yields. Is the great enthusiasm for AI starting to crack?
A sharp wave of selling swept through Asian markets today, leading to the erasure of nearly $900 billion in market value, according to estimates based on declines in the region's major stock exchanges. The focus of the pressure was on tech stocks and companies that particularly benefited from the global race for artificial intelligence.
South Korea led the declines, with the KOSPI index plunging by more than 5%, while shares of chip giants like Samsung suffered sharp drops. In Japan, the Nikkei index fell by about 3%, and the stock exchanges in China, Taiwan, and India also traded with significant declines. The data reflects a sharp shift in investor sentiment after a long period in which AI-related stocks led the gains in the markets.
The reason is not necessarily an abandonment of artificial intelligence itself, but a growing fear that some stocks in the sector have reached too high a valuation. The declines in Asia followed weakness on Wall Street, where stocks like Micron, Nvidia, and Broadcom fell amid doubts about the ability of massive investments in AI infrastructure to continue generating growth and profits at the pace the markets have already priced in.
At the same time, rising oil prices and continued pressure in the bond market are adding to investor concerns. High yields make risky and relatively expensive investments less attractive, and particularly hurt tech companies whose value is largely based on expectations of future growth. Despite the sharp profit-taking, many stocks in the sector still recorded significant gains since the beginning of the year, which reinforces the assessment that this is, at least at this stage, a reassessment of price levels and not a collapse of the entire artificial intelligence sector.
The turmoil in Asia may also affect the crypto market. When investors enter a "risk-off" mode, volatile assets tend to be the first to be hit by selling and exposure reduction. Crypto, and especially Bitcoin and smaller digital currencies, is often influenced by the general sentiment in the markets, especially in periods when tech stocks lead the direction. However, the connection is not absolute, and the reaction of the crypto market also depends on internal factors such as capital flows, regulation, and demand from institutional investors.
The central question now is whether the wave of selling is a temporary correction after sharp gains in AI stocks, or the beginning of a deeper change in investor perception regarding how much they are willing to pay for the artificial intelligence dream. Either way, the trading day in Asia demonstrated how much enthusiasm for the new technology has become a key factor in global markets and how, when trust is shaken, hundreds of billions of dollars can be wiped out within hours.
