Two overlapping fears are driving the exodus. First, investors are questioning the sustainability of massive AI infrastructure spending, particularly after a Wall Street Journal report suggested Nvidia could provide a financial backstop of about $250 billion for an OpenAI-backed data-center project. The report fueled concerns that Nvidia may increasingly need to support the financing of its customers’ large AI investments, raising doubts about the long-term economics of the AI ecosystem.
Second, rising competition from China is threatening the memory chip market. Reports that a Chinese state-backed company has started mass-producing immersion deep ultraviolet lithography tools—an area dominated by ASML—and that Chinese chipmakers could expand domestic memory production have intensified fears of future oversupply and pricing pressure. SK Hynix’s U.S.-listed shares closed at $143.02 on Monday, below their $149 initial public offering price, underscoring the rapid shift in sentiment.
The contagion spread to European and U.S. premarket trading. ASML fell more than 8% on Monday, while Infineon Technologies and STMicroelectronics dropped 4% and 1.8% respectively. In U.S. premarket action on Tuesday, Nvidia was down around 1.2%, Intel and AMD were more than 3% lower, and Micron dropped nearly 5%.