Japan’s Nikkei Slides on Mounting AI Concerns

The Nikkei 225 Index fell 1.82% to close at 67,777 on Tuesday, extending its decline to a fourth consecutive session and following an overnight tech-led selloff on Wall Street. The downturn reflected growing concerns over the AI trade, as investors reassessed capital spending prospects amid rising borrowing costs. Market sentiment was further pressured by intensifying competition from China’s ChangXin Memory Technologies (CXMT), which reported progress in developing a new chip architecture. Broadcom CEO Hock Tan remarked that the AI boom had attracted investors whose strategies resembled gambling, while billionaire Ray Dalio described AI as a “classic bubble” nearing a potential burst as interest rates rise and investors seek to convert wealth into cash. Technology and AI-related stocks recorded substantial losses, with Kioxia Holdings plunging 13.3%, SoftBank Group dropping 8.5%, Tokyo Electron falling 7.2%, Taiyo Yuden declining 4.9% and Advantest losing 2.9%.