Stock market turmoil sheds stark light on the opaque AI economy
📰 source: theguardian_business · 💼 business
last week's ai sell-off started with two china-related shocks. on monday, chinese memory chipmaker cxmt floated in shanghai and soared 466% to 3.3tn yuan. the same day, reports emerged that china built its own deep-ultraviolet lithography tools, breaking asml's monopoly. ai chipmakers slumped globally, dragging indices. south korea's kospi fell 11.5% on tuesday and another 6% on wednesday as sk hynix and samsung took hits. the nasdaq briefly dropped into correction territory on thursday, down more than 10% from its high; nvidia lost 5%+ and apple retook the top spot as the world's largest listed company.
friday brought a rebound after amazon and microsoft posted strong earnings, with the kospi jumping nearly 20%, though it still recorded its worst month since october 2008. analysts called the sell-off an overreaction. cxmt's dram chips are complementary to nvidia's gpus, and a global memory shortage is expected to last until 2030. the lithography news is more serious, but chinese tools are years from matching asml's reliability. investors also grew jittery over a reported $250bn nvidia backstop for openai's datacentre project, highlighting how much of the ai economy rests on nvidia.
why it matters: china's chip breakthroughs and an opaque ai economy centered on nvidia spooked markets, but analysts see overreaction amid memory chip shortages.
source: theguardian_business
sentiment: -0.60 · impact: 0.90