Nvidia's $250B OpenAI Funding Sparks Asia Chip Rout
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- South Korea's KOSPI plunged more than 8% to a three-month low, triggering a circuit breaker, while Japan's Nikkei dropped 4% following a 2.2% decline in the Philadelphia Semiconductor index overnight.
- Nvidia shares fell 5% overnight after the WSJ reported the company is in talks to provide roughly $250 billion in financing guarantees for OpenAI as part of a massive data center project.
- CXMT Corp shares surged 466% on debut day in Shanghai, with Pepperstone's Chris Weston noting "a growing sense of optimism within mainland markets about China's ability to build a globally competitive AI ecosystem."
- ASML shares dropped 8.5% after The Information reported China has begun manufacturing domestically developed immersion deep ultraviolet lithography machines, a chipmaking tool long dominated by the Dutch supplier.
- Brent crude extended Monday's nearly 9% plunge to $87.55 a barrel as a lull in US-Iran hostilities followed Washington's Saturday suspension of air strikes; Trump said the US was having "good talks" with Iran.
- Traders priced about a 38% chance the Fed hikes by 25 basis points on Wednesday, with 10-year US Treasury yields dipping about four basis points to 4.64% and the yen trading at 163.78 to the dollar, barely above a four-decade low.
Why it matters: Nvidia's $250B OpenAI financing reveal exposed how the AI trade's biggest winner must now bankroll its own customers' capex, while CXMT's 466% debut and China's domestic lithography showed the chip supply chain is being challenged at both ends. A 38% Fed hike chance now lands on Asian markets already deep in AI repricing.
