Nvidia chief brushes off tech sell-off as a buying opportunity
Nvidia chief executive Jensen Huang brushed off a significant market wobble stoked by growing concerns surrounding AI, hailing the widespread sell-off as a buying opportunity for investors in a technology which is just “beginning”.
Huang’s intervention came as Asian markets tumbled during Monday trading, following the Nasdaq’s 4.2 per cent plunge on Friday – its biggest fall in over a year – as shares in chipmakers and computer memory producers declined.
The fall was triggered by fears of stretched valuations of companies riding on an AI high. Meanwhile the S&P 500 also fell 2.6 per cent, severing its nine week growth streak.
But Huang did not share investor sentiment, instead announcing a series of deals in South Korea to secure Nvidia’s memory chip supply.
He said: “Everybody should be very excited; they can now buy stock at a cheaper price, and it’s absolutely true that the future of AI is very bright.”
SK Hynix signed a multi-year partnership with Nvidia that will see it commit to developing advanced types of memory for global AI data centres, as the US tech firm spreads into robotics, personal computers and AI supercomputers.
South Korea’s top index plunges
Despite Nvidia’s deal, South Korea’s Kospi saw its AI rally come to a screeching halt on Monday, forcing traders to trigger a 20 minute trading halt.
The blue-chip index has doubled in six months off the back of heavyweights SK Hynix and Samsung, but plummeted more than 10 per cent in early trading, before trimming back losses to hover at 7,488.7 points.
Both of its tech heavyweights also fell more than 10 per cent, yanking the index back down from last week’s record high.
The Korea Exchange held an emergency meeting to discuss measures to ensure market stability amid the rising volatility, after foreign investors sold a net $10bn work of Korean shares in the last month alone, piling pressure on the won.
The currency also fell to its lowest level against the dollar since March 2009, leading the government to announce a series of measures on Sunday to boost the currency, including vowing to take action against speculative trading.
In Tokyo, the tech heavy Nikkei 225 fell 3.8 per cent, with Taiwan’s TAIEX dropping 3.4 per cent.
Mistakes will not be ‘repeated'”‘ with AI
International Monetary Fund (IMF) managing director Kristalina Georgieva also expressed concerns over AI, after noting prior failures to spot inequalities.
Georgieva admitted failing to recognise inequalities which arose from globalisation, and doubled down on her focus to not allow it to be “repeated” with AI, as the tech already begins to impact labour markets and local economies.
She said: “We collectively, including the fund, did not appreciate the backlash against globalisation that came from the fact that, yes, the world economy is doing better as a whole, but many communities were hollowed out because their jobs disappeared and there was not enough attention to them.”
The IMF has a lending capacity of $1 trillion, with Georgieva confirming her intention to keep all 191 members working for the good of the economy and to ensure the world will be able to withstand more frequent shocks, as crises continue to appear around the globe.