▲AI PRISM* Customized Economic Briefing
*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "artificial intelligence (AI)-based customized news recommendation and summarizing service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.
[Key Issue Briefing]
■ AI Overheating Debate: Chip stocks plunged as doubts struck the market over whether the astronomical AI investments by the five largest U.S. hyperscalers (operators of ultra-large data centers) will translate into actual profits. At the same time, market anxiety intensified as controversy erupted over so-called "shadow debt," through which Big Tech has funded data center construction costs in ways that do not appear on their financial statements.
■ TSMC's U.S. Investment: TSMC, the world's largest foundry (contract chip manufacturer), confirmed its largest-ever semiconductor investment in Arizona, accelerating the buildout of a local ecosystem. Analysts say the decision to accept construction costs several times higher than in Taiwan was driven by a combination of its overwhelming dependence on North American customers, U.S. political concerns over semiconductor security, and expanded investment by rival Intel.
■ China's AI Pursuit: Assessments emerged that the technology gap between the two countries is rapidly narrowing, as a new model from Chinese startup Moonshot AI outperformed top U.S. AI models on some benchmarks. Meanwhile, explosive demand pushed computing power to its limits, leading to a temporary suspension of new sign-ups. This once again confirmed that shortages in semiconductor and power infrastructure caused by U.S. export restrictions are a structural weakness limiting the global expansion of Chinese AI.
[News of Interest to Global Investors]
1. Tech Stocks Shaken by AI Overheating Fears… Can Big Tech Earnings Calm the Unease?
- Key Summary: On U.S. markets, the Philadelphia Semiconductor Index (SOX) plunged 10% last week, marking the largest weekly decline since April 2025. As the five largest U.S. hyperscalers (operators of ultra-large data centers) invest $770 billion (about 1,141 trillion won) in AI this year, market doubts over whether such astronomical investment will translate into actual profits for Big Tech are cited as the main cause of the stock plunge. Accordingly, the Nihon Keizai Shimbun reported that the AI-related "shadow debt" of Alphabet, Microsoft, Amazon, Meta, and Oracle (off-balance-sheet debt raised by Big Tech through private equity funds and special-purpose companies to finance data center construction costs) reached a total of $1.65 trillion (about 2,455 trillion won), an eightfold increase in four years. Meanwhile, Big Tech earnings announcements, starting with Alphabet and Tesla on the 22nd and continuing through the end of this month, have emerged as a watershed that will determine whether tech stocks rebound.
2. TSMC: "Even at 5 Times the Cost, We'll Build 12 U.S. Fabs… We Won't Cede to Rivals"
- Key Summary: TSMC confirmed its Arizona investment at a total of $265 billion (about 397.5 trillion won), $100 billion (about 148 trillion won) more than its previous plan, and will build a total of 12 facilities, including 10 fabs (semiconductor production plants), two advanced packaging facilities, and one research and development (R&D) center. Wendell Huang, TSMC's chief financial officer (CFO), acknowledged that U.S. construction costs are 4 to 5 times higher than in Taiwan, making initial margin dilution unavoidable, but stressed, "We have no intention of ceding the market to any competitor." Analysts say the decision was driven by a combination of maintaining relationships with North American customers, who account for 78% of TSMC's total revenue, U.S. political concerns over semiconductor security, and pressure from Intel's expanded investment. In addition, Huang projected that the 2-nanometer process generated its first revenue in the second quarter of this year and will establish itself as a new growth driver from the third quarter.
3. Gap With U.S. Narrowed to 'Weeks,' but China's AI Blocked by Power, Chip Walls
- Key Summary: The Kimi K3 model, with 2.8 trillion parameters, unveiled by Chinese startup Moonshot AI, outperformed GPT-5.6 Sol and Claude Fable 5 on some benchmarks, drawing assessments that the U.S.-China AI technology gap has narrowed from "months to weeks." However, as surging demand overloaded graphics processing units (GPUs), Moonshot temporarily suspended new sign-ups, and Ryan Fedasiuk, a researcher at the American Enterprise Institute (AEI), warned that serving millions of people would require billions of dollars in semiconductors and power. Meanwhile, immediately after Kimi K3's release, the stock of partner ChinaSoft surged 26%, while rival Zhipu AI (overseas name Z.ai) plunged 28.49%, reflecting starkly divided fortunes within the industry. Accordingly, Alibaba Group also announced the launch of its new 2.4 trillion parameter model "Qwen3.8," with competition in China's AI industry intensifying further.
[Reference News for Global Investors]
- Key Summary: As Chinese authorities grapple with stabilizing the stock market, China Chengtong Group and China Guoxin Group—central enterprises (major state-owned firms directly under party and government control)—declared stock purchases and stake expansions worth 10 billion yuan (about 2.2 trillion won) and 50 billion yuan (about 10.9 trillion won), respectively. In addition, numerous listed state-owned enterprises including China Coal Energy, China Railway (CRRC), and China Aluminum (CHINALCO) successively disclosed plans to buy back their own shares and expand stakes, with 212 companies reportedly filing related disclosures on the Shanghai Stock Exchange alone this month. Guotai Fund analyzed that the short-term correction in A-shares (mainland Chinese stocks) is the result of a combination of leveraged trade liquidation and overheated tech stocks, and that the core logic underpinning a medium-term rise remains unchanged. Meanwhile, Morgan Stanley also noted that there is no need to view the market as excessively pessimistic, adding that the AI industry's growth momentum continues.
5. Miri Capital, Which Embraced STIC, Buys Up KOSDAQ Across the Board
- Key Summary: Miri Capital, a U.S.-based asset manager and the largest shareholder of STIC Investments, a leading Korean private equity fund (PEF) manager, is buying up KOSDAQ-listed companies across the board this month, including raising its stake in data center and network firm KINX (093320) to 17%. Behind this aggressive investment is a $1.2 billion (about 1.78 trillion won) emerging market fund made up of 50 institutions including U.S. and Canadian university endowments and global family offices, of which $200 million (about 290 billion won) is classified as permanent capital that requires no redemption, enabling a long-term, aggressive buying structure. Miri Capital also advocates a "consultavist" strategy that combines corporate consulting and activism, and has recorded annualized returns in the low-to-mid 20% range over the past seven years. Meanwhile, some in the industry voice concerns that, as in the STIC Investments and Gabia cases, additional management control sales could emerge among companies targeted for Miri Capital's stake expansion.
6. Amid Controversy Over U.S. ADR Dual-Listing Workaround… Kakao Mobility Deepens Its Dilemma
- Key Summary: As Kakao Mobility pursues a U.S. American Depositary Receipt (ADR) listing, a structural problem is coming to the fore in which dual-listing regulations leave Kakao (035720), the largest shareholder, bearing the burden of fulfilling the board's shareholder fiduciary duty and staged disclosure requirements. The prevailing view is that this ADR push is a choice for the exit of the 29% stake secured by the Texas Pacific Group (TPG) consortium, the second-largest shareholder and financial investor (FI), which invested a total of 640 billion won. Accordingly, under the dual-listing guidelines announced by the Financial Services Commission and the Korea Exchange early this month, when listing overseas, the listed parent company must disclose in stages the process and results of fulfilling the board's five duties, and if the ADR's potential reflux into the domestic market is recognized, additional review matters under the Capital Markets Act arise.
