{"slug": "ai-sell-off-deepens-as-chip-stocks-slump-kospi-drops-10", "title": "AI Sell-Off Deepens as Chip Stocks Slump, Kospi Drops 10%", "summary": "South Korea's Kospi index plunged more than 10% and Japan's Nikkei slid over 4% on Monday as a deepening sell-off in artificial intelligence-linked stocks, triggered by a Financial Times report showing credit default swaps for major AI players including Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom, and Nvidia had risen to record highs, hit chipmakers hardest. SK Hynix and Samsung Electronics each lost over 10% in Seoul, while Nvidia fell 5% in U.S. trading, ceding its spot as the world's most valuable listed company back to Apple.", "body_md": "**July 28, 2026**, (Inside AI) — A deepening rout in artificial intelligence-linked stocks sent shockwaves through Asian markets Monday, with South Korea’s Kospi index plunging more than **10%** and Japan’s Nikkei sliding over **4%**. The sell-off, triggered by mounting fears over AI companies’ debt levels, hit chipmakers hardest: **SK Hynix** and **Samsung Electronics** each lost over **10%** in Seoul, while **Nvidia** fell **5%** in U.S. trading, ceding its spot as the world’s most valuable listed company back to **Apple**.\n\nThe catalyst was a **Financial Times** report highlighting that credit default swaps tied to major AI players including **Oracle**, **SpaceX**, **Alphabet**, **Amazon**, **Meta**, **Broadcom**, and **Nvidia** had risen to record highs. CDS prices reflect the cost of insuring against corporate default, and their surge signals growing skepticism about the sector’s borrowing binge.\n\nThe tremors began in U.S. markets, where the **Philadelphia Semiconductor Index** dropped **2.23%** on Friday, even as the broader **S&P 500** and **Nasdaq** were little changed. In Asia, the sell-off intensified: trading on the Kospi was briefly halted after the index breached circuit breaker thresholds. **SK Hynix**’s U.S.-listed shares had already fallen **7%** on Monday, setting the stage for the Asian rout.\n\nJim Reid, global head of credit strategy at Deutsche Bank, noted that markets are\n\n**“caught between a new sell-off in chipmakers and the positive news that the US-Iran pause from over the weekend would continue as both sides negotiate in talks.”**\n\nThat geopolitical reprieve failed to calm nerves. Oil prices, often a barometer of global risk appetite, tumbled: **Brent crude** fell **8.70%** on Monday, its largest one-day drop since April, and was down a further **2.0%** on Tuesday to **$86.59** per barrel, after trading at **$101** on Friday morning. The decline in energy costs helped push nominal **10-year Treasury yields** down **2.8 basis points**, but real yields hit new highs, a headwind for equity valuations.\n\nThe AI debt fears mark a stark shift from the euphoria that has driven chip stocks to dizzying heights. A [Bank for International Settlements quarterly review](https://www.bis.org/publ/qtrpdf/r_qt2409e.htm) recently warned that the concentration of AI-related borrowing could amplify financial stability risks if growth expectations falter. The CDS spike suggests bond markets are pricing in exactly that scenario.\n\nYet the sell-off was not uniform. In a dramatic counterpoint, Chinese memory chipmaker **CXMT** debuted on the Shanghai Stock Exchange on Monday and surged more than **400%** in its first day of trading. The listing, one of China’s largest tech IPOs this year, underscores the divergence between Western AI giants grappling with debt concerns and state-backed Chinese firms capitalizing on domestic semiconductor ambitions. CXMT’s [official technology roadmap](https://www.cxmt.com/en/) outlines plans to challenge incumbents in DRAM and NAND flash, a goal that has drawn significant government support.\n\nThe turmoil also reflects a broader repricing of risk. The **Philly Semiconductor Index** has now fallen more than **15%** from its July peak, while the **Nasdaq** futures pointed to further losses on Tuesday, down **0.74%**. Analysts at **Goldman Sachs** noted in a client note that AI-related capital expenditure has ballooned to over **$200 billion** annually across the top hyperscalers, raising questions about returns on that investment.\n\nFor now, the market’s focus remains on credit markets. The CDS moves are a leading indicator of stress, and they suggest that even as equity investors clung to AI narratives, bond traders were quietly hedging against a downturn. With earnings season underway, all eyes will be on guidance from chipmakers and cloud providers to see if the debt fears are justified.", "url": "https://wpnews.pro/news/ai-sell-off-deepens-as-chip-stocks-slump-kospi-drops-10", "canonical_source": "https://insideai.news/news/ai-in-business/ai-sell-off-deepens-as-chip-stocks-slump-kospi-drops-10/5470/", "published_at": "2026-07-28 08:16:34+00:00", "updated_at": "2026-07-28 08:46:04.271032+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-policy", "ai-infrastructure"], "entities": ["SK Hynix", "Samsung Electronics", "Nvidia", "Apple", "Financial Times", "Oracle", "Alphabet", "Amazon"], "alternates": {"html": "https://wpnews.pro/news/ai-sell-off-deepens-as-chip-stocks-slump-kospi-drops-10", "markdown": "https://wpnews.pro/news/ai-sell-off-deepens-as-chip-stocks-slump-kospi-drops-10.md", "text": "https://wpnews.pro/news/ai-sell-off-deepens-as-chip-stocks-slump-kospi-drops-10.txt", "jsonld": "https://wpnews.pro/news/ai-sell-off-deepens-as-chip-stocks-slump-kospi-drops-10.jsonld"}}