Technology shares came under renewed pressure on Thursday as investors weighed higher US inflation, the prospect of interest-rate increases and growing concerns about debt linked to artificial intelligence investment.
Global technology markets suffered further losses on Thursday, with investors reassessing the outlook for companies tied to artificial intelligence and semiconductor production.
South Korea’s Kospi 200 fell by more than 8%, while Japan’s Nikkei 225 dropped 4.9%. Major chipmakers were among the biggest decliners, reflecting concerns about the valuations of companies that have benefited from the AI investment boom.
The market downturn followed weaker performance on Wall Street, where the Nasdaq Composite and the S&P 500 recorded their sharpest declines since July.
Inflation adds to market uncertainty
The latest US inflation figures showed consumer prices rising 3.7% year on year in September, above expectations. The data strengthened concerns that the Federal Reserve could keep interest rates higher for longer or consider further increases.
Higher borrowing costs can put pressure on technology companies whose valuations depend on expectations of strong future growth. They can also make large investments in data centres, chips and AI infrastructure more expensive.
Questions over the AI investment boom
Investment in artificial intelligence has supported major technology companies and semiconductor manufacturers. However, investors are increasingly questioning whether the expected returns will justify the scale of spending.
The International Monetary Fund has also warned that a sharp correction in AI-related investment could create wider economic risks, particularly if it coincides with geopolitical tensions and rising public debt.
A sustained decline in technology shares could affect investment decisions well beyond the technology sector, including data centres, energy infrastructure and companies supplying equipment to AI developers.
Outlook remains uncertain
Markets will continue to watch inflation data, central-bank signals and company earnings for signs of whether the latest sell-off represents a temporary correction or a broader reassessment of AI-related valuations.
The scale of the market moves underlines the sensitivity of global investors to changes in interest-rate expectations and the possibility that some technology investments may take longer than expected to generate returns.
