Asia tech stocks drop as AI volatility bites

Asian semiconductor and technology shares resumed their slide on Wednesday as investors reacted to renewed weakness in AI-related names on Wall Street. The regional downturn followed an overnight session in the United States where major equity benchmarks lost ground, led by technology stocks tied to artificial intelligence.

The Nasdaq Composite fell about 0.97% and the S&P 500 (SPX) slipped about 0.26%, reversing part of the previous day’s gains in chipmakers. The decline in these U.S. indices set the tone for trading in Asia, where semiconductor and technology stocks came under pressure amid concerns about stretched valuations in AI beneficiaries.

The weakness in Asia was preceded by notable intraday swings in the United States as investors reassessed high-flying AI-related stocks. The S&P 500 (SPX) finished down 19.08 points at 7,386.65, reflecting broad but contained pressure in the market.

The Dow Jones Industrial Average (DJIA) moved in the opposite direction, rising 86.10 points to 50,872.11, underscoring a divergence between traditional blue-chip names and the technology sector. The Nasdaq composite, which is more heavily weighted toward technology and growth stocks, fell 250.84 points to 25,678.82 as chip, memory and other AI-building-block companies swung from early gains to losses during the session.

One example of this volatility was a major memory-chip maker that shifted from a strong intraday jump to a steep drop by the close. These abrupt reversals highlighted investor sensitivity to any sign that the AI-driven rally in hardware providers may be overextended in the near term.

Alongside the broader technology sell-off, SoftBank Group drew attention as its funding plans linked to AI assets faced headwinds. Talks with potential creditors to raise at least $6 billion through a margin loan backed by SoftBank’s stake in OpenAI have stalled.

SoftBank reduced its initial fundraising target from $10 billion and is now considering a range of alternative financing options. While discussions over the margin loan have paused, the company may still proceed with such a transaction at a later stage, leaving the structure and timing of any deal uncertain.

The stalled talks underscore the challenges of monetizing sizeable AI-related holdings at a time when markets are increasingly cautious about valuations in the sector. They also come as volatility in AI and semiconductor names is exerting pressure across both U.S. and Asian equity markets.