Technology

Asian Tech Stocks Slide Amid US AI Regulation Concerns

By Al Jazeera Staff

Asian tech shares fell sharply as worries grew that the Democrats’ win in the US midterm elections could lead to tighter AI regulation and slower data‑centre expansion. The Nikkei dropped 6 percent, its steepest one‑day fall since April 2025, while South Korea’s and Taiwan’s indices plunged more than 8 percent after opening. South Korean authorities temporarily halted trading on the Kospi and eased rules on retail investors’ leveraged positions. In China, state entities bought equities to stabilise the market.

The Nasdaq fell 5.5 percent, wiping $3 trillion off S&P 500 firms, as investors feared a slowdown of the AI boom that had been encouraged by former President Donald Trump. Analysts said the sell‑off exposed the fragile foundation of AI‑related stocks, which had been built on optimistic expectations.

Korean AI chipmakers Samsung Electronics and SK Hynix fell nearly 6 percent and 9.4 percent, respectively, while TSMC dropped as much as 8.5 percent before closing 4.7 percent lower. In Japan, Kioxia fell 11 percent and SoftBank Group slid 11 percent.

Taiwan’s market closed 4.5 percent lower, its biggest weekly decline since 1991, but the government highlighted continued demand for AI, high‑performance computing and cloud services.

Experts warned that investors are beginning to factor in the cost of building data centres, with new regulations expected in the US, Australia and the UK. Toby Walsh, chief scientist at the AI Institute at the University of New South Wales, said developers had built data centres without sufficient social licence, and that the resulting regulatory push could help deflate an over‑inflated bubble.

"We’re spending money a bit too quickly," Walsh told Al Jazeera. "And maybe this is the way to let that bubble deflate in a manageable way."