AI Stock Selloff Deepens as Tech Giants Face Rising Costs and Investor Jitters
Technology stocks across Asia, Europe, and the United States came under intense pressure on Friday as investors continued to pull back from artificial intelligence-related shares, sparking a broad AI stock selloff that rattled global markets. Concerns over the soaring costs of building and maintaining AI infrastructure weighed heavily on sentiment, sending semiconductor companies and major tech firms into the red. The downturn highlighted growing fears that the AI boom may be entering a more challenging phase after months of explosive growth.
Japanese investment giant SoftBank led the decline, plunging more than 12% and triggering a wider selloff across Asian technology markets. The company’s losses were amplified by weakness in Arm Holdings, the chip designer it controls, which also fell sharply in U.S. trading. Investors were further unsettled by reports suggesting OpenAI could delay its much-anticipated initial public offering as it struggles to attract sufficient demand at a proposed $1 trillion valuation, raising questions about the sustainability of sky-high AI valuations.
The selloff spread rapidly through Asia’s semiconductor industry, with South Korea’s SK Hynix and Samsung Electronics suffering steep losses, while Japan’s Advantest and Tokyo Electron also tumbled. Taiwan’s TSMC and electronics manufacturer Hon Hai joined the decline as investors reduced exposure to chip-related stocks. In Hong Kong and mainland China, technology heavyweights including Alibaba, Tencent, Baidu, Xiaomi, and Semiconductor Manufacturing International Corporation also faced significant selling pressure, reflecting growing uncertainty across the sector.
European chipmakers were not spared from the turmoil. Industry leaders such as ASML, Infineon, ASM International, STMicroelectronics, and Be Semiconductor all traded lower as markets opened. Meanwhile, U.S. semiconductor companies including Intel, Sandisk, Arm, and Marvell posted notable premarket losses. The widespread weakness underscored investor concerns that the rapid expansion of AI technologies is driving up semiconductor costs faster than many companies can comfortably absorb.
Adding to market anxiety, Apple and Microsoft recently announced price increases on key products, citing higher component and manufacturing expenses. Apple raised prices on selected MacBook and iPad models, while Microsoft increased prices for Xbox consoles. These moves have fueled fears that rising chip costs could squeeze profit margins across the technology industry, potentially slowing growth for some of the world’s largest companies. As investors reassess the long-term economics of artificial intelligence, the latest market downturn serves as a reminder that even the most promising technologies are not immune to financial realities.
source: cnbc