South Korea's KOSPI Index Drops 7.57% Amid AI Investment Doubts

On October 15, 2026, South Korea's KOSPI index experienced a significant decline, closing down 7.57% at 5,554.22, marking its lowest level since April. This downturn was largely attributed to growing investor skepticism regarding the profitability of substantial investments in artificial intelligence (AI) infrastructure.

The sell-off was particularly severe in the semiconductor sector, with Samsung Electronics and SK Hynix seeing drops of approximately 9.5% and 11%, respectively. Both companies have seen substantial declines from their peak values, with SK Hynix down about 35% and Samsung down roughly 22% from their highs. The KOSPI itself has fallen nearly 40% from its peak of 9,386 in June 2026.

Several factors contributed to this market turmoil. Higher-than-expected inflation data from the U.S. raised concerns about sustained high interest rates, which negatively impact growth stocks reliant on future earnings. Additionally, signs of financial distress in AI-related sectors and disappointing revenue forecasts from major AI firms like OpenAI and Anthropic further fueled investor anxiety. This led to significant foreign selling of Korean shares, with billions exiting the market in October.

The negative sentiment also affected new market entrants. On October 20, 2026, Elice, an AI-related firm, saw its shares plummet 32% on its debut, despite a strong oversubscription prior to listing. This stark contrast between demand and market performance raises questions about the sustainability of AI valuations.

Investors are now left to ponder whether the current market correction is a healthy adjustment or the beginning of a broader reevaluation of AI economics. The future will depend on whether revenue from AI services can keep pace with the heavy investments in AI hardware.