Asian stock markets plunge as investors reassess the AI boom

2026, October 15

South Korea / Japan / Taiwan

Asian technology shares suffered a sharp sell-off as higher interest rates and inflation concerns prompted investors to reconsider the valuations of artificial-intelligence and semiconductor companies. South Korea's KOSPI fell approximately 7.6%, Japan's Nikkei 225 dropped around 4.9%, and Taiwan's Taiex declined about 3.4%. Major chipmakers were among the companies hit by the downturn.

The falls came despite strong results from Taiwan Semiconductor Manufacturing Company (TSMC), which reported a 69% year-on-year increase in quarterly net profit. Investors are increasingly concerned that expensive AI infrastructure projects may be vulnerable to higher borrowing costs or a slowdown in future spending. The International Monetary Fund has also warned that an AI investment correction and rising government bond yields could threaten global financial stability.

Why it matters: A prolonged correction could affect retirement funds, technology investment, borrowing costs and economic confidence well beyond Asia.

Sources: Reuters — Global markets sell off as technology shares fall · Associated Press — Inflation concerns weigh on AI stocks