TOKYO: Japanese tech stocks fell on Tuesday (Jan 28) following a plunge in US tech stocks driven by the emergence of a low-cost Chinese generative AI model.
US chipmaker Nvidia led a rout on Wall Street, falling nearly 17 per cent on fears that Chinese firm DeepSeek’s chatbot could threaten US dominance in artificial intelligence. Nvidia stock was up slightly in after-hours trading.
Heavyweight chip-related stocks tracked an overnight drop in the Nasdaq, but gains in bank shares helped the Topix reverse early losses.
The Nikkei ended the morning session down 0.57 per cent at 39,340.15, after falling as much as 1.7 per cent earlier in the session.
The broader Topix was up 0.45 per cent at 2,770.5.
In Tokyo, Nvidia supplier Advantest was down nearly 10 per cent on Tuesday to drag Nikkei the most.
There were further falls for AI-backer SoftBank Group, which fell 4.71 per cent, and data-centre cable maker Furukawa Electric was down 8 per cent.
Both had already fallen heavily on Monday, with SoftBank now 13 per cent lower after two days and Furukawa down 20 per cent.
Chip-making equipment maker Tokyo Electron fell 3.78 per cent.
Tech-heavy markets in Taiwan and South Korea were closed for a holiday. Markets in China were also shut to usher in the Chinese New Year and Hong Kong trade closes at noon.
AUSTRALIA’S AI SHARES RATTLED
In Australia, stocks exposed to the artificial intelligence wave fell sharply on Tuesday as investors feared DeepSeek would threaten the dominance of current market leaders.
Shares of AI software firm Appen fell 3.3 per cent, while AI chipmaker Brainchip lost 10.3 per cent by 0029GMT. The technology sub-index was down 1 per cent.
Data centre landlords in Australia – Goodman Group, NEXTDC and DigiCo Infrastructure REIT – tumbled 6.4 per cent, 6.2 per cent and 11.1 per cent respectively, as DeepSeek’s model sparked concerns of lowered spending on infrastructure.
Australia’s data-centre market saw outsized investment last year as the AI boom drove a frenzied demand, with giants such as Nvidia pouring billions to build capacity.
