This Friday (6), Japanese shares recorded their biggest drop in a single trading session since Donald Trump announced the tariffs for the so-called "Liberation Day", in April 2025. In South Korea, the sharp drop in shares of technology companies triggered the circuit breaker —trading interruption mechanism— for 20 minutes. Investors have turned away from technology stocks as fears revive that the artificial intelligence boom is coming to an end.
The Nikkei 225, an index focused on technology companies, and the Topix, which brings together shares from different sectors, closed down almost 6% in a session described by market operators in Tokyo as a "real massacre". The main South Korean index, the Kospi, fell 8.5%, falling below 5,000 points, causing the circuit breaker.
With the losses, the Nikkei 225 began to accumulate a decline of more than 20% in relation to the peak recorded in June, entering bear market territory.
"Many people are exceeding the risk limits set for their positions in technology companies," said Prashant Bhayani, chief investment officer for Asia at BNP Paribas Wealth Management. "We have become accustomed to a very low volatility environment, but that has clearly come to an end."
Companies linked to artificial intelligence, such as SoftBank, an investor in OpenAI, and memory chip manufacturer Kioxia, were among the hardest hit, following similar losses on Wall Street. On Thursday (5), the Nasdaq 100 index closed down 6.4%, eliminating more than US$3 trillion (R$16.5 trillion) in the market value of American stocks.
Analysts said the selloff was triggered by concerns that Democratic victories in key US states in Tuesday's elections would result in stricter regulation of artificial intelligence and data centers. The scenario has heightened fears that the strong appreciation of technology stocks is about to undergo a correction.
"What we are seeing is the effect of the rapid dismantling of positions that are too concentrated in investments," said the head of operations at an international financial institution in Tokyo. "The bet on artificial intelligence was extremely concentrated among investors and, even after all these sales, it is still possible to say that it remains very disputed."
South Korea, which benefited from strong demand for memory chips destined for artificial intelligence data centers, was also hit by the wave of sales this Friday (6). Shares of semiconductor manufacturers have tumbled on fears that Democrats' dramatic victory in the US midterm elections could slow the expansion of data centers.
Samsung Electronics and SK Hynix, the two largest memory chip manufacturers in the world and together responsible for half of Kospi's composition, fell 9.9% and 11.7%, respectively. Investors fear that demand for the companies' products will decline if large technology companies that operate large-scale data centers reduce spending on new artificial intelligence structures.
At the end of the trading session, the Kospi registered a drop of 6% and began to accumulate a decline of more than 40% in relation to the June peak.
The Prime Minister of Japan, Sanae Takaichi, stated this Friday (6) that the government was "closely following developments".
She told reporters it was still difficult to determine whether the global sell-off in semiconductor and artificial intelligence companies would be temporary "or could persist."
Japan has been one of the main destinations for global funds interested in taking advantage of the boom in artificial intelligence investments in markets outside the United States.
Shares of SoftBank, whose founder, Masayoshi Son, is one of the most enthusiastic proponents of artificial intelligence in Asia and has invested heavily in OpenAI, fell almost 11% this Friday (6). The shares are down close to 60% compared to their June peak.
The widespread flight of risky assets also caused strong demand for Japanese public debt securities. As a result, the yield on shares maturing in ten years fell 0.14 percentage points, to 2.63%.
Despite the falls recorded this Friday (6), Albert Yong, managing partner of hedge fund manager Petra Capital Management, based in Seoul, said he does not expect a significant reduction in investments in artificial intelligence infrastructure.
"Large cloud computing service providers may turn to other US states or countries to build data centers," he said. "Given the United States' competition with China for leadership in artificial intelligence, it is unlikely to significantly scale back its AI infrastructure expansion plans."
