Asian stock markets tumbled on concerns that the boom in artificial intelligence spending may be running ahead of real demand.
Japan's Nikkei and South Korea's KOSPI both fell as a sell-off in chip stocks deepened, according to Economy Middle East. South Korean stocks were hit especially hard, tumbling 8%.
The trigger, according to reporting carried by MSN, was Meta Platforms' plan to sell computing power. That move raised questions about whether the industry is building far more AI capacity than it can use, driving investors out of chipmakers.
The picture was split across regions. On Wall Street, the Dow Jones Industrial Average climbed to a fresh record high on Wednesday and software stocks surged, buoyed in part by Meta's AI-cloud strategy. But a punishing semiconductor sell-off dragged the Nasdaq 100 lower, leaving the U.S. market, as one report put it, "sharply split."
The pressure on Asia was intensified by a broader retreat. According to Reuters, foreign investors are dumping Asian stocks at a record pace, in part because trades tied to AI "winners" have become crowded and vulnerable to sudden reversals.
Why it matters: Chipmakers in Japan, South Korea and across Asia are central suppliers to the global AI build-out, so doubts about whether that spending will pay off ripple quickly through their markets and the savings of ordinary investors who hold those stocks.