AI NewsWaveAI Investment Jitters Hit Wall Street and KOSPI; OpenAI Cuts Fundraising Target
Key points
- Tech stocks plunge on Alphabet, Amazon and Intel results
- KOSPI falls more than 3% on the 30th to the 5730 level
- OpenAI cuts fundraising target by $10 billion
Concerns about the profitability of AI investment shook the U.S. and South Korean stock markets. According to Chosun Biz, the three major New York indexes all closed lower on the 29th (local time) as Alphabet's weak earnings revived worries about AI investment. Digital Daily reported that Alphabet plunged 12.6% and the Nasdaq Composite fell 1.4% that day, and that Fortinet and ServiceNow also plunged more than 20% after their earnings releases.
The decline continued on the 30th. Digital Daily reported that negative outlooks followed the earnings releases of Amazon and Intel after Alphabet, sending the three major New York indexes lower together, with the Nasdaq's drop especially pronounced. Reports differed on Intel's decline: Digital Daily wrote 29% in its headline and IT Chosun wrote 28%, while GeekNews reported that it plunged by as much as 30% intraday. GeekNews also reported that the Nasdaq fell more than 3.5%.
The Korean market was affected too. According to IT Chosun, the KOSPI closed on the 30th at 5,730.74, down 206.92 points (3.48%) from the previous trading day. Chosun Biz reported that foreign investors net sold 1.8 trillion won on the KOSPI, while IT Chosun wrote 1.6 trillion won of foreign selling in its headline, so the figures differed. Chosun Biz said in its headline that SK hynix fell 7%. A separate Chosun Biz analysis noted that the KOSPI closed its first trading day of the year on Jan. 2 at 4,309.63 and rose as high as 8,476.48 on June 30.
There were changes in the fundraising market as well. Citing the Financial Times (FT), EBN reported that OpenAI lowered its investment target from the $30 billion it set last month to $20 billion. Chosun Biz reported that the target was cut by $10 billion (about 13.3 trillion won).
In recent developments, AI Times reported that Google kept its dominance of the search market with AI search, but the advertising profitability of AI search falls short of traditional search, which has become a burden. Its headline said $500 billion in market capitalization had evaporated.
Glossary The Nasdaq Composite is an index calculated from the share prices of all stocks listed on the U.S. Nasdaq market. Net selling is a state in which investors sold more than they bought over a given period.