Most Asian markets rebounded on Friday from the previous day’s technology rout fueled by concerns about the AI boom, which Federal Reserve boss Kevin Warsh said would deliver huge benefits to the global economy.
Seoul and Tokyo posted strong gains in early trading, boosted by chipmakers SK hynix and Kioxia, after being hit on Thursday as investors retreated from the once-dominant AI sector.
Selling was fueled by better-than-expected U.S. inflation data, which increased bets on a Fed interest rate hike, as well as concerns about the financial health of data center operator CoreWeave due to its huge debt load.
The New Jersey company, which borrowed heavily to finance large purchases of expensive semiconductor chips from Nvidia, fell 15.5% in the United States on Wednesday, as yields on some of its bonds soared, reflecting increased concern about its future.
That added to concerns about the entire AI tech complex, but Nvidia chief Jensen Huang boosted morale Thursday by defending the company and its health.
“CoreWeave’s strength is improving every day,” he told Bloomberg. “I’m optimistic. Their cost of capital is coming down.”
CoreWeave shares soared nearly six percent.
“Huang’s defense of CoreWeave’s financial situation was enough to get the NeoCloud complex off the ground, sending AI shares higher and giving the broader market something resembling a boost,” wrote Stephen Innes of SPI Asset Management.
“At one moment the market was considering the possibility that the AI financing machine had started eating its own tail, and the next moment it was listening to the high priest of the boom explaining that the patient was getting stronger.
“AI Jesus had entered the trading floor and, for a time at least, the machines found religion again.”
Seoul jumped more than 2% and Tokyo about 1.8%, although they fell 7.6% and 4.9% respectively on Thursday.
Hong Kong, Shanghai, Singapore, Taipei, Mumbai, Bangkok and Manila also increased.
Frankfurt rose in the morning, but London and Paris fell.
Fed chief Warsh said Friday that AI was the “most consequential change” to the global economy in his lifetime, predicting its effects would be positive but the road ahead was “rocky.”
At an event at the IMF and World Bank Annual Meetings in Bangkok, he said the AI investment boom would drive up prices in the short term, but “there really is, I think, a huge benefit for the global economy, for the U.S. economy on the horizon.”
He also reiterated his previously expressed belief that technology would “make the economies and countries that use it wisely more productive.”
Gn bussni
