US and South Korean stock markets fall: investors doubt AI profits

US and South Korean stock markets have experienced a significant decline over several days, primarily driven by growing scepticism about the profitability of artificial intelligence companies. Samsung and SK Hynix lost over 12% of their value, dragging down South Korea's entire Kospi index. According to analysts, investors have begun questioning the ever-rising expenditure on AI infrastructure.

US and South Korean stock markets have experienced a multi-day decline since 23 June 2026, hitting technology giants particularly hard those connected with artificial intelligence. There is no single specific trigger, but most experts point to growing doubt about whether the AI boom will deliver the returns investors expected.

How did the decline begin?

It all started on 23 June 2026, when South Korean memory chip manufacturers Samsung and SK Hynix saw their share prices plummet more than 12%. According to CNN, this dragged down the entire country's stock market, with the Kospi index falling 10%, triggering an automatic 20-minute trading halt to ease panic. Samsung and SK Hynix are the world's two largest producers of RAM, controlling approximately 67% of that market and roughly half of the Kospi index's total market capitalisation.

The decline spread rapidly to US markets as well. Reuters reported that Nasdaq and S&P 500 fell by 2.2% and 1.4% respectively, their worst performance in more than a week. Micron, the third-largest player in the memory market, saw its share price drop 13%, despite the company being among the best performers in the S&P 500 so far this year. Nvidia shares fell more than 4%, meaning the world's most valuable company experienced a reduction in market value of at least $200 billion. Intel and AMD losses ranged between 5.8% and 9.4%, while Alphabet (Google's parent company) stock declined 1%.

Elon Musk's billionaire status at risk

Elon Musk did not escape the losses either. His space company SpaceX, which went public only in mid-June, saw its share price plunge from $225 to $156 per share. According to Bloomberg, Musk lost his billionaire status as a result. Notably, SpaceX is also connected to artificial intelligence; the company owns the AI start-up xAI, which is developing the chatbot Grok.

Why are investors worried?

Analysts cite ever-increasing expenditure on AI infrastructure, largely financed through borrowing, as the most common reason. A senior executive at a global investment firm confirmed to Reuters: "Some recent AI sector news has raised questions about all this spending, capital deployment and semiconductor sector expansion."

Goldman Sachs analysts warned clients on the evening of 22 June that the market had become "more vulnerable to any news that casts doubt" on optimistic profit expectations. According to Politico, investors are increasingly asking when their investments will start to pay off.

US analysts also cite Reuters uncertainty surrounding a US-Iran peace deal and expectations that the Federal Reserve will raise its base interest rate by the end of the year, which would harm large technology companies' stock prices.

Companies limit AI use

According to Politico, no one expects demand for artificial intelligence to decrease significantly. However, according to the Financial Times, several companies among the first to adopt AI, including Walmart and Uber, have begun limiting its use-the technology is simply too expensive. Even Amazon and Meta have imposed restrictions. Deloitte's generative AI chief Kosti Perrikos commented to the FT: "The cost of computing resources will start to worry both chief financial officers and management. Consumers and businesses have been led to believe that AI is cheap or even free, but that is certainly not the case."

Workers are coming back

Journalists also note a new trend in the labour market. Several companies that rushed to replace workers with artificial intelligence are now bringing them back, typically 6 to 12 months after active AI implementation. According to research firm Forrester, 55% of executives who replaced workers with AI regret the decision within 18 months. Recruitment firm Robert Half reports that nearly a third of such companies have already brought some workers back.

Sam Altman, CEO of OpenAI, acknowledged in early June that AI spending has recently become a "huge problem" for some companies. Goldman Sachs analysts forecast that the use of AI agents will result in a 24-fold increase in token consumption by 2030, further exacerbating semiconductor shortages over the next 12 to 18 months.