Asian markets tumble as AI worries hit KOSPI, Nikkei

Global stock markets, particularly in Asia, experienced a sharp selloff on Tuesday, July 28, 2026, driven by intensifying investor anxiety over the sustainability of massive spending in the artificial intelligence sector. The downturn, which extended a recent slide in U.S. technology shares, saw major indices in South Korea and Japan plunge to multi-month lows as fears over capital expenditure and rising Chinese competition rattled chipmakers.

South Korea's KOSPI index plummeted nearly 10%, triggering a market-wide circuit breaker to halt the rapid decline, while Japan's Nikkei fell more than 4%. The selloff followed a 2.2% drop in the U.S. Philadelphia Semiconductor Index on Monday and reflected growing doubts about the returns on hundreds of billions of dollars being funneled into AI infrastructure. Analysts noted that investors are increasingly seeking proof that leading AI spenders can justify their enormous investments.

Specific reports fueled the negative sentiment. Shares in Nvidia fell 5% after a report indicated the company was in talks to provide substantial financing guarantees for a major OpenAI data center project, highlighting the circular and costly nature of the...