Nvidia Dethroned as Chip Stocks Plunge on AI Jitters
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- South Korea's Kospi index halted trading for 20 minutes on Tuesday morning after sliding 8%, then resumed and fell further to around 10% lower, with Samsung Electronics and SK Hynix both down about 12%.
- Nvidia fell 5% in New York on Monday after the Wall Street Journal reported it is in talks to provide around $250bn to OpenAI as part of a massive data-centre project.
- Apple overtook Nvidia as the world's most valuable listed company after rising roughly 25% year-to-date, while the iPhone maker sits far less exposed to the AI capex cycle.
- SK Hynix US-listed shares dropped 7.5% on Monday, falling well below the $149 (£112.11) offer price set at its record-breaking Nasdaq debut on 9 July.
- Japan's Nikkei 225 was almost 3.8% lower on Tuesday morning, dragged down by its tech-heavy composition mirroring the regional selloff.
- The Kospi has triggered circuit-breaker halts 8 times so far this year; the index had more than doubled from January to mid-June but has since lost around a third of its value.
- Some analysts are publicly questioning whether AI technology can generate enough profit to recoup the hundreds of billions of dollars governments and companies are spending on it.
Why it matters: South Korea's Kospi has triggered 8 circuit-breaker halts in 2025 and is now down roughly a third from its mid-June peak — a volatility cycle that crystallizes investor doubts about whether the hundreds of billions being committed to AI capex, including Nvidia's reported $250bn OpenAI data-centre deal, can deliver returns before the selloff broadens.
