At a Glance
South Korea's benchmark index drops more than 8%, while Japan's Nikkei falls 7%.
Taiwan stocks also plunge more than 8% as chipmakers face heavy selling.
Samsung Electronics falls nearly 10%, SK Hynix drops 12%, and TSMC loses as much as 8.5%.
Investors move into government bonds, the Japanese yen and Swiss franc.
Fears of tighter AI regulation and delayed data center projects fuel the selloff.
Wall Street's AI rout has spread across Asia, sending semiconductor stocks into a steep decline and pushing investors towards traditional safe-haven assets.
The global AI selloff gathered pace on Friday as Asian markets opened sharply lower. Investors reacted to Wall Street's worst technology-driven decline since April 2025, fearing that political pressure and tighter regulation could slow the massive investment behind the AI boom.
Key Details
Japan's Nikkei plunged 7% shortly after opening, while South Korea and Taiwan's benchmark indexes fell more than 8%. Markets later recovered some ground as bargain hunters stepped in.
Chipmakers suffered some of the steepest losses. Samsung Electronics dropped nearly 10%, SK Hynix fell 12%, Kioxia sank 14%, and TSMC lost as much as 8.5%.
AI-focused SoftBank Group slid 11%, while the cost of insuring against its potential debt default climbed to a four-year high.
The Nasdaq had already plunged 5.5% overnight, while the Philadelphia Semiconductor Index dropped 12.2%.
Market Reaction
The selloff triggered a shift towards safer assets. US Treasuries and government bonds in Japan and China gained, while the US dollar weakened against the Japanese yen and Swiss franc.
The US 10-year Treasury yield stood at 4.838%, near its lowest level since September 9.
Nasdaq futures later rose 1.4%, while European stock futures recovered some ground, although market sentiment remained fragile.
Why It Matters
The AI investment boom has become a major driver of global stock markets. If spending on data centers slows, the impact could spread from chipmakers to cloud providers, technology companies, and their suppliers.
Traders will be watching whether Asian markets can stabilise, whether investors continue moving into safe-haven assets, and whether political pressure in the US threatens future AI infrastructure projects.
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Source: Reuters
Time: 11:00 AM EEST
