Global stocks fall as US sell-off over AI valuations spreads
Decline in Asian markets led by companies most exposed to demand for artificial intelligence
 South Korea’s Kospi was one of the year’s top performing indices due to AI enthusiasm © AFP via Getty Images
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William Sandlund and Arjun Neil Alim in Hong Kong
Published2 hours ago
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Asian equities tumbled on Wednesday, extending a technology-led sell-off in US markets triggered by fears of an AI investment bubble.
South Korea’s Kospi, one of the year’s top performing indices due to enthusiasm over artificial intelligence, slid as much as 6.2 per cent and Japan’s Nikkei 225 index fell 4.3 per cent in early trading before paring losses.
The drop came after the S&P 500 and tech-heavy Nasdaq on Tuesday declined 1.2 per cent and 2 per cent respectively, as concerns rose about the elevated valuations for AI companies and Wall Street executives warned markets were vulnerable to a retreat.
Hong Kong’s Hang Seng index slipped 0.9 per cent and mainland China’s benchmark CSI 300 lost 0.7 per cent, while in Taiwan the Taiex shed 2.4 per cent.
US and European markets are poised for further declines on Wednesday. Futures for the Stoxx Europe 600 index and Nasdaq 100 fell 1 per cent during Asian trading.
“There is some point where we will be probably closer to a correction than we are to a 10 per cent, 20 per cent [rise] up from here,” said Andrew Schlossberg, chief executive of Invesco, speaking during a financial summit organised by the Hong Kong Monetary Authority.
Asian stock markets have outperformed this year but their gains have been concentrated in shares of companies exposed to AI demand in the US. OpenAI, Anthropic and Elon Musk’s xAI have had their values marked up repeatedly over the past year.
“AI expectations have increased significantly in north Asia over the past month,” said Jason Lui, head of Asia-Pacific equity and derivative strategy at BNP Paribas, citing a string of deals between the region’s chipmakers and US AI businesses.
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Asian chipmakers were among the companies most heavily sold. SK Hynix and Samsung Electronics, manufacturers of the high bandwidth memory chips used in AI, slipped 7 per cent and 6.1 per cent, respectively.
Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker, shed 3 per cent.
Yields on 10-year US Treasuries fell 0.03 percentage points to 4.05 per cent and the dollar weakened 0.1 per cent against a basket of its peers. Bond yields move inversely to prices.
Major Asian currencies and government debt were steady in early trading. The dollar weakened 0.3 per cent against the yen to trade around ¥153.1 while yields on the 10-year Japanese government bond fell 0.01 percentage points to 1.65 per cent.
Bitcoin reversed losses as it gained 0.9 per cent to $101,209 a token. Gold edged up 0.2 per cent to $3,940 a troy ounce after selling off on Tuesday.
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Ah yes. The healthy correction. Isn’t that what the financial journos say?
Well… what about healthy cleanup?
If someone is happy about it… does it make them a bad person? Asking for a friend
The bet on AI is a bet on eventual AGI with a moat. AGI is a bet that scaling statistics creates electric superhumans, before regulations, energy costs, or good ol’ physics (you can only pack a finite number of transistors into one GPU) spoil the party. And it is a bet that these future superhumans do not go awry, never hallucinate and cannot be commoditized. Eventually it is a bet that this is the first parabolic spike that is not a spike but rather an eternal ascent. It is also a bet fueled by circular investments that give some really ponziesque vibes. I am sure this time it is different, though. I will sell everything, including my and my kids’ kidneys and corneas, and invest in OpenAI’s IPO, which will surely be fairly valued.
Gravity always wins in economics.
(Edited)
It is great to hear from the people who are so very angry that they aren’t part of this tremendous rise in equity markets and hence very very bitter and angry. Meanwhile my whole portfolio (which is only 10% US) has gone up 30% in the last year gain and 50% in the last three. I would try to hear about your sense of injustice but it is hard to as the wall of money muffles sounds.
Every time the market blips — we had blips before — someone cries ‘Market Meltdown’! Only to find it rebounding strongly in a few months time. How about you are honest with yourself and revisit your comment in six months’ time.
Meanwhile you should read Aesop’s fable about the fox and sour grapes. There is a reason why it is a classic.
And remember, time in market is more important than timing the market.
For young investors out there, remember there will always be negative nancys pouring cold water over your plans. It is what humans like to do to keep you in your humble place.
Do your research, have an ear on the ground for advice and tips, but if someone talks the good game but doesn’t ever participate, then feel free to ignore their advice. Lots of haters out there.
What did you invest in? A general direction of your thrust will be interesting to know.
Please, please, it's too much winning, we can't take it anymore.
Someone’s winning when they are covering their shorts .
Finally, watch out for falling knives …
HERE WE GO...........
We have been screaming this for a year.
Each time open ai the obliterated 3 new industries the next week
But did you short the market?
More please
(Edited)
Automated inferences (AI) stemming from large language models are precisely that - inferences not intelligence. The most likely structure to a sentence, based on statistical probability and permutations isn’t knowledge but conventional expectation. Intelligence is sparked from unconventional and unexpected logical pathways. Give me actual intelligence anytime. A lazy brain rots. An active brain thrives and drives humanity’s upside..
Or perhaps Artificial Imbecility.
Precis.
Automated Inference (A.I.) should be the phrase or word currently hijacked in the guise of Artificial Intelligence.
Market meltdown on its way
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