AI RETHINK:
Volatility has resurfaced in AI stocks amid concerns about increased competition, possible overcapacity and whether big investments would pay off
A selloff in chipmakers gathered pace last week, driving the high-profile group of stocks to a bear market on worries that the artificial intelligence (AI) spending spree is becoming harder to justify. The cohort of semiconductor powerhouses last week saw its worst week since April last year, with a key industry gauge sinking 20 percent from a record. News of a powerful Chinese AI model, Kimi K3, by start-up Moonshot AI Technology Co (月之暗面) further shook markets. Similar to when China’s DeepSeek (深度求索) announced its AI model last year, another low-cost rival to big Western AI models like ChatGPT and Claude could potentially hurt demand for computer chips and other components.
A trader works on the floor of the New York Stock Exchange during morning trading in New York on Friday.
All three major US indices retreated on Friday, led by the tech-focused NASDAQ, which lost 1.4 percent. Oil prices jumped more than 4 percent as the US and Iran traded attacks again, with international benchmark Brent North Sea crude closing at US$88.10 a barrel. On Friday morning, tech sold off worldwide. Indices tumbled 6.47 percent in Taipei, 4.03 percent in Tokyo and 3.05 percent in Shanghai as stocks such as Taiwan Semiconductor Manufacturing Co (台積電) dropped 7.29 percent.
