Asian stocks slump after US tech rout amid AI jitters

Concerns that Democrats in the US will push back against data center projects are weighing on an AI trade that is already on shaky footing amid growing doubts about profitability. Japanese and South Korean shares tumbled on Friday, following a massive selloff in tech stocks on Wall Street the previous day. Tokyo's benchmark Nikkei 225 index fell 5.5% in early trade, while Seoul's tech-heavy Kospi index slid as much as 8.8%, triggering a circuit breaker which suspended trading for 20 minutes.

Taiwan's benchmark TAIEX index was also down more than 8%. Asian tech giants including Samsung Electronics, SK Hynix and Taiwan Semiconductor Manufacturing Company (TSMC) have borne the brunt of the artificial intelligence-related selloff. Chip-related shares in Japan also took a beating, with Tokyo Electron stock trading down around 9% and Kioxia shedding 13%.

On Thursday, US markets were hammered by a sharp retreat in tech stocks, particularly those involved in the buildout of artificial intelligence infrastructure like data centers.