Global equity markets in the first half of this year assigned a high value to the growth that artificial intelligence promised to deliver. As hyperscalers including Amazon, Google and Meta competed to expand investment in AI infrastructure, investors read their aggressive capital expenditure as a leading indicator of future AI demand.
Past the midpoint of the year, the market's focus began shifting from expectations of growth to concerns about a peak in that growth. Those concerns took concrete shape when Alphabet's second-quarter results showed negative free cash flow for the first time since the company went public in 2004. Because the scale of its AI infrastructure investment had outrun its own cash-generating capacity, investors began questioning whether the pace of AI spending could be sustained.
Market concerns then went a step further, with questions emerging about how capital circulates among companies within the AI industry. The point raised is whether a structure in which hyperscalers and Nvidia supply funds to OpenAI, Anthropic and others, which in turn buy GPUs, data centers and cloud resources, makes the AI ecosystem appear to be growing faster than it actually is.
Those worries pushed global equity markets, which had been climbing, into a correction from June. Korea's market in particular reflected concerns about a possible peak in the AI industry first and most sharply. Measured from its mid-June high, the KOSPI at one point fell more than 40%. Given the size of the decline over such a short span, pessimism spread among investors who feared the fallout from an AI bubble.
Look at how capital is moving in global markets, however, and a different picture emerges. While Korea's market went through heavy volatility centered on semiconductors, earnings and share prices at Microsoft, Amazon, Google and Nvidia remained solid. Large-scale fundraising and revaluations of AI companies have also continued in the Korean market. Market sentiment worries about an AI bubble, but global capital is moving toward AI at an even faster pace.
What matters to investors now may not be guessing the answer in advance. It is more important first to observe the unusual changes now under way with a cool head. With concerns over AI investment reflected most strongly in memory chips, it is worth asking whether sentiment among Korean investors has become excessively depressed over the past two months. This is a moment when it matters more to look at the entire global supply chain of the AI industry than to remain within the frame of a single industry or country.
