On Thursday, Japanese tech stocks experienced a decline as concerns regarding AI infrastructure spending permeated into Asian markets, leading to a downturn in AI-related stocks. Softbank Group Corp experienced significant declines, ranking among the top losers in the benchmark Nikkei 225, which saw a drop of as much as 7.25%. This decline contributed to the index’s overall performance in Asia, which was down 1.23%. The group reduced some of its losses and was last observed trading 3% lower. This decline occurs as the tech-heavy Nasdaq Composite experienced a 1.81% decrease overnight, influenced by losses in Oracle, Broadcom, Nvidia, and other AI-related stocks.
The decline in Oracle’s performance followed a report on Wednesday indicating that Blue Owl Capital’s efforts to fund the cloud infrastructure company’s $10 billion data center in Michigan had encountered obstacles. Last week, the company denied a report claiming it had postponed certain projects for AI leader OpenAI until 2028. Technology-oriented SoftBank has experienced significant fluctuations in its stock price over the past month, driven by concerns regarding expenditures related to artificial intelligence that have unsettled the market. At the beginning of the year, the group disclosed intentions to allocate $500 billion towards AI infrastructure in the U.S., collaborating with OpenAI, Oracle, and other partners. In September, it unveiled five new U.S. AI data center locations under Stargate, which is OpenAI’s comprehensive AI infrastructure platform.
Other Japanese technology equities also experienced declines. Semiconductor equipment supplier Advantest experienced a decline of up to 5%. Counterparts Lasertec, Renesas Electronics, and Tokyo Electron experienced declines ranging from 3% to 4%. Jesper Koll stated that a significant portion of the components utilized in data centers, power centers, and AI hardware enablers is “Made in Japan, and can only be made in Japan.” Japanese technology, particularly in the realm of AI, appears increasingly susceptible to concerns regarding expenditures in the U.S. tech sector.
On Wednesday, Japan’s trade figures revealed a 7.4% increase in exports of electrical machinery, while exports related to semiconductors experienced a notable surge of 13% year on year. Koll noted that the U.S.-led surge in technology expenditure was resulting in an increase in exports of specialized machinery and equipment. Losses were less pronounced in South Korean chip heavyweight Samsung Electronics at 0.93%, while SK Hynix reversed course to gain 0.73%. Taiwan’s TSMC, the world’s largest contract chip manufacturer, experienced a slight decline.