SINGAPORE — Artificial intelligence-related stocks drove sharp moves across global financial markets on Friday as investors reassessed the sustainability of the sector's rapid gains, triggering broad declines in semiconductor shares despite continued signs of strong demand for advanced computing infrastructure.
Equity markets in Asia, Europe and the United States came under pressure as a selloff in chipmakers accelerated, with investors rotating away from companies that had led much of this year's AI-driven rally. The shift followed renewed concerns about whether heavy spending on artificial intelligence infrastructure will generate returns quickly enough to justify elevated valuations.
Taiwanese semiconductor stocks led losses in Asia, while Japan's Nikkei also fell sharply. The declines came even after Taiwan Semiconductor Manufacturing Co. reported quarterly earnings that exceeded market expectations, highlighting a disconnect between strong corporate results and broader investor caution over AI-related investments.
In Europe, major stock indexes opened lower as technology shares weighed on regional benchmarks. U.S. futures also pointed lower, with investors extending a retreat from semiconductor and other AI-linked companies that had outperformed earlier in the year.
Market sentiment was also influenced by the release of Kimi K3, a new open-weight artificial intelligence model from Chinese startup Moonshot, which intensified competition in the global AI industry and added to investor questions about future profitability and pricing power across the sector.
Analysts said the latest market moves reflected a reassessment of expectations rather than a weakening of demand for AI technologies. Companies across the semiconductor supply chain continue to report robust investment in advanced chips and computing capacity, but investors have become increasingly focused on the timing of financial returns from multibillion-dollar AI spending programs.
Broader market sentiment was further affected by rising geopolitical tensions in the Middle East, which pushed oil prices higher and added to concerns about inflation and economic growth. The combination of geopolitical uncertainty and the technology-sector selloff contributed to increased market volatility across asset classes.
Trading remained volatile through Friday, with investors awaiting additional corporate earnings, economic data and further updates from major technology companies that could provide clearer signals about the pace of AI investment and its impact on global markets.
