The KOSPI index is displayed in the dealing room of Hana Bank in Seoul, Thursday. The benchmark bourse closed at 7,648.09, down 7.89 percent from the previous session. YonhapSeoul shares plunged Thursday, with the benchmark KOSPI falling below the 8,000 mark for the first time in about 15 trading sessions, as chip heavyweights tumbled on growing concerns over weakening demand for artificial intelligence (AI) semiconductors.According to the Korea Exchange, KOSPI closed at 7,648.09, down 7.89 percent from the previous session. The index opened at 7,933.10, marking the first time in about 15 trading sessions that it had fallen below 8,000 during intraday trading. At around 9:07 a.m., KOSPI futures also fell by more than 5 percent, briefly triggering a sell-side sidecar.Foreign investors drove the decline, net selling 5.46 trillion won ($3.5 billion) worth of shares on the main bourse, marking a 10th consecutive day of net selling. Institutional investors also sold a net 114.6 billion won, while retail investors purchased a net 5.39 trillion won.The sharp decline came after reports said Meta may enter the cloud computing business by using its surplus computing capacity. The news raised concerns that AI demand may be weaker than expected and that the AI investment cycle could begin to slow. Adding to the pressure were reports that Apple is in supply talks with two Chinese memory chipmakers.Samsung Electronics closed at 286,000 won, down 9.06 percent from the previous session. SK hynix closed at 2,187,000 won, down 14.57 percent.The secondary Kosdaq was no exception to the dampened sentiment, dropping 6.74 percent to close at 866.72. The index opened at 904.53, down 2.67 percent, before extending its losses to more than 5 percent in the afternoon, triggering a sell-side sidecar at 12:47 p.m.Analysts said the Meta news should be viewed more as noise surrounding the AI investment narrative — similar to the DeepSeek shock early last year and the TurboQuant episode early this year — rather than evidence that an actual slowdown in AI demand or earnings has materialized."It is worth noting that several events that could potentially reverse the currently chilled investment sentiment are still ahead, including Samsung Electronics' preliminary earnings on July 7, SK hynix's ADR listing on July 10 and earnings on July 29, and U.S. Magnificent Seven earnings in late July," said Han Ji-young, an analyst at Kiwoom Securities.As foreign investors continued their heavy net selling, the won-dollar exchange rate remained above the 1,550 won level following the previous session. The rate closed at 1,555.8 won, up 0.9 won from the previous session.