BANGKOK — World shares were mostly lower on Friday, with Tokyo’s Nikkei 225 losing 4% as heavy selling of computer chipmakers and other AI-related shares dragged markets lower.
South Korean markets were closed, but shares in Taiwan fell 6.5% a day after its TSMC, the world's biggest contract manufacturer of computer chips, announced it plans to spend an extra $100 billion on building fabrication plants in the U.S.
TSMC dropped 7.3% on Friday.
In early European trading, Germany's DAX dropped 0.6% to 24,774.69 and the CAC 40 in Paris fell 0.7% to 8,318.74. Britain's FTSE 100 edged 0.1% lower to 10,560.93.
The future for the S&P 500 declined 0.8% while that for the Dow Jones Industrial Average was 0.6% lower.
Stocks related to artificial intelligence have been under pressure for weeks because of worries that their prices have shot too high and that voracious demand for computer memory and processors may not be sustainable if AI ends up not producing as much profit and productivity as promised.
The announcement of a new Chinese open-sourced AI model by startup Moonshot, Kimi K3, further shook up markets. Similar to when China's DeepSeek announced its AI model in early 2025, another low-cost rival to big Western AI models like ChatGPT and OpenAI could potentially hurt demand for computer chips and other components that have greatly benefited from rapid adoption of AI.
In other Asian trading, the Nikkei lost 4% to 64,141.12, at times trading near its lowest level in over a month, as shares in memory maker Kioxia slumped 16.1%.
Computer chip equipment maker Tokyo Electron sank 8.2%. Chip testing equipment maker Advantest tumbled 7.2%.
SoftBank Group, which has invested tens of billions of dollars in AI-related businesses, shed 9%.
The Hang Seng in Hong Kong gave up 2% to 24,505.38, while the Shanghai Composite index lost 3.1% to 3,764.15, dipping to its lowest level in nearly 11 months.
Hong Kong-trade shares in Knowledge Atlas Technology Joint Stock Co., Ltd., branded internationally as Z.ai and previously known as ZhipuAI, tanked 28.5%.
In Australia, the S&P/ASX 200 declined 0.5% to 8,796.70.
“Now investors are taking profits from the first-half winners and moving toward areas that were left behind,” Stephen Innes, of SPI Asset Management, said in a commentary.
On Thursday, the S&P 500 fell 0.5% even though nearly three out of every four stocks in the index rose after more of the country’s biggest companies reported better earnings for the latest quarter than analysts expected.
The Dow Jones Industrial Average dipped 0.2%, and the Nasdaq composite lost 1.5%.
Nvidia fell 2.4%, making it the heaviest weight on the index. Other stocks that have benefited from strong demand for AI also sank, giving back some of their stellar gains.
Micron Technology fell 5.6% to shave its gain for the year so far below 199%. SanDisk fell 12.6% but is nevertheless up 494% for the year. Western Digital sank 9.2% but is still up 171% for the year.
In other dealings early Friday, oil prices surged as fighting in the Middle East intensified.
The United States expanded its airstrike campaign against Iran early Friday by hitting more bridges and collapsing a tower at a key Iranian port, part of U.S. President Donald Trump's threats to start striking infrastructure to pressure Tehran to ease its chokehold on the Strait of Hormuz.
Oil prices are near their highest level in a month because of worries that the war with Iran will keep oil tankers out of the Strait of Hormuz and block shipments of crude from the Persian Gulf to customers worldwide.
The price for a barrel of Brent crude, the international standard, rose 2% to $85.87 per barrel. U.S. benchmark crude oil was up 2.3% at $80.73 per barrel.
The U.S. dollar rose to 162.40 Japanese yen from 162.38 yen. The euro fell to $1.1440 from $1.1443.