International stocks slide as concerns about AI and tech company values spread

International markets plunged on Tuesday night, as stocks across the Asia-Pacific region sold off on worries about the sky-high values of AI and tech companies.

The Kospi stock index in South Korea plunged more than 6%. Japan’s Nikkei 225 average slid about 4.5%, and Hong Kong’s Hang Seng index tumbled more than 1%. Stocks in Taiwan also fell around 2.5%.

Last week, the Kospi hit a record high, fueled by gains in artificial intelligence stocks.

But on Wednesday, tech stocks fared the worst across Asia, with shares of global electronics giant Samsung falling 5.5% and chipmaker SK Hynix dropping more than 6%.

SoftBank, a major investor in AI firms, sank more than 14%, wiping out more than $30 billion in market value.

The sell-off came after a day of significant selling in the U.S. that brought the recent global market rally to a halt. The S&P 500 closed Tuesday down 1.1%, the Nasdaq tumbled 2% and the Russell 2000 fell 1.8%.

The largest publicly traded company in the world, Nvidia, dropped nearly 4% on Tuesday. Palantir, another AI firm whose business involves government contracts, sank nearly 8% even after beating Wall Street’s earnings expectations.

Late Monday, the CEOs of Goldman Sachs and Morgan Stanley warned that a possible market pullback may be on the horizon. Matters were made worse by lackluster earnings on Tuesday afternoon from Advanced Micro Devices and Super Micro Computer, both of which manufacture chips used for AI services.

Enthusiasm about artificial intelligence and the companies that produce AI services has been overflowing for months. Companies from Amazon to Microsoft to OpenAI have announced a steady stream of multibillion-dollar deals with each other, raising questions over the sustainability of the industry and its sources of funding.

U.S. stock futures, an indication of where markets will open tomorrow, showed that losses were likely to continue Wednesday after the opening bell rings in New York.

S&P 500 futures pointed to a drop of 0.5%, and Nasdaq futures indicated a decline of about 1% on Wednesday.

European markets were also poised to drop. Futures for Germany’s benchmark stock index showed a decline of 1.2%, while futures for major indexes in France and Britain showed drops of more than 0.5%.

U.S. stocks are coming off of a remarkable run, repeatedly setting recent record highs. For the year so far, the S&P 500 is still up more than 15%. The Nasdaq Composite, which more closely tracks the largest tech companies, still has a gain of more than 20% this year.