\n<\/p>\n
The sell-off in AI stocks has intensified, driving South Korea\u2019s stock market down to its lowest level in three months.<\/p>\n
Investors continued to ditch chip stocks on Tuesday, amid rising concerns about the huge amount of borrowing among AI companies to fund their datacentre expansion plans.<\/p>\n
The South Korean semiconductor companies SK Hynix and Samsung Electronics fell by more than 10%, dragging the country\u2019s Kospi share index down by 11.5% to its lowest point since mid-April.<\/p>\n
US chip stocks extended their recent losses when Wall Street opened on Tuesday, with Intel, Advanced Micro Devices, Sandisk, Western Digital Corp and Seagate Technology all down by more than 4%. The Nasdaq 100 index of leading tech stocks fell nearly 2% and is more than 10% below its early June record high \u2013 the technical definition of a market correction.<\/p>\n
Analysts attributed the sell-off to renewed worries over AI investment spending, and competition from cheaper Chinese companies, after a report by the Information that China has begun mass production of homegrown deep ultraviolet (DUV) chip-making tools.<\/p>\n
\u201cWe believe the market was likely spooked by the progress of China\u2019s chip-making equipment capabilities, and was worried that this progress would threaten the competitive position of global chip making and chip equipment leaders,\u201d said Jing Jie Yu, an equity analyst at Morningstar, adding that the sell-off was \u201clargely a kneejerk reaction and overdone\u201d.<\/p>\n
On Monday, shares in the Chinese memory chip maker CXMT rose by 466% when it floated on the Shanghai stock exchange, underlining China\u2019s drive to create its own AI supply chain.<\/p>\n
Investors may also be growing jittery about the \u201ccircular funding\u201d at the heart of the AI industry, through which artificial intelligence firms finance one another.<\/p>\n
On Monday, the Wall Street Journal reported that Nvidia was in discussions with OpenAI about providing $250bn (\u00a3188bn) for a massive datacentre project in Ohio. Backing from Nvidia, which has an investment grade credit rating, could make it less expensive to raise funding for the project.<\/p>\n
skip past newsletter promotionFree newsletter | Every weekday<\/p>\n
Sign up to Business Today<\/span><\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n after newsletter promotion<\/p>\n News of the talks knocked Nvidia\u2019s shares on Monday; they closed 5% lower, while the cost of insuring the chip company\u2019s debt against default using a credit default swap (CDS) rose.<\/p>\n \u201cThe market reaction to the Nvidia news was swift. Nvidia fell 5% and closed the session below the $200-per-share mark. More importantly, Nvidia\u2019s five-year CDS spiked, suggesting that it may not yet be the right time to buy the dip,\u201d said Ipek Ozkardeskaya, a senior analyst at Swissquote.<\/p>\n","protected":false},"excerpt":{"rendered":" The sell-off in AI stocks has intensified, driving South Korea\u2019s stock market down to its lowest level in three months. Investors continued to ditch chip stocks on Tuesday, amid rising concerns about the huge amount of borrowing among AI companies to fund their datacentre expansion plans. The South Korean semiconductor companies SK Hynix and Samsung<\/p>\n","protected":false},"author":1,"featured_media":51472,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[1942,4287,5122,3106,2884,18658,5965,15011],"class_list":{"0":"post-51471","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-chip","9":"tag-ditch","10":"tag-intensifies","11":"tag-investors","12":"tag-markets","13":"tag-selloff","14":"tag-stock","15":"tag-stocks"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/51471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=51471"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/51471\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/51472"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}