“Black Thursday” as AI spending fears sink Asian markets
The latest sell-off hit South Korea hardest, where it’s being called “Black Thursday”. Samsung and SK Hynix were hit especially hard.
(Image: Artit Wongpradu / Shutterstock.com)
Fresh concerns about spending on AI infrastructure sparked sharp declines across Asian markets Thursday. In Korea, the benchmark KOSPI plunged nearly 8%, prompting some to call it “Black Thursday”. Some of the biggest beneficiaries of the AI boom and memory chip crunch were hit particularly hard: Samsung shares sank 9.5% Thursday, while SK Hynix shares fell more than 11%. The sell-off did not spread to European and U.S. markets, where stocks largely stabilized. The downturn began Wednesday in the U.S., however: the Nasdaq fell nearly 2%, with Oracle and CoreWeave, two companies closely tied to the AI boom, posting steep losses.
Debt to fund AI expansion raises concerns
Several developments have put markets under pressure, the U.S. financial magazine Bloomberg explains. They included Anthropic’s business results, which were solid but also suggested that revenue growth is likely slowing. At the same time, rising yields on U.S. Treasuries have reignited debate over whether they are a better investment than the AI industry, whose further development remains uncertain. “Ultimately, the AI revolution will be judged not just by how much computing power we build, but by how profitably we use it”, says Manish Singh of Crossbridge Capital. AI may be the future, but high debt-servicing costs are the present.
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Because South Korea’s economy plays a central role in the AI boom, these latest doubts have so far triggered the sharpest swings there. The Korea Times called the trading session, which has since ended, “Black Thursday”. After the latest losses, South Korea’s stock index is now more than 40% below its mid-June peak. That puts it close to the average decline in seven previous market crises, the newspaper quotes analyst Lee Kyoung-min of Daishin Securities as saying. Those include Black Monday in 1987, the 1997 Asian financial crisis, the dot-com crash in 2000 and the 2008 financial crisis.
(mho)
