Just now! Plunge, circuit breaker! Chip giant collapses!
Korean chip giants face heavy selling.
On June 5, at market open, Korean chip giants all took a heavy hit. SK Hynix plunged over 9%, Samsung Electronics dropped over 7%. As a result, the Korean stock index fell sharply, with the KOSPI index once dropping over 6%. The Korea Exchange triggered the KOSPI circuit breaker mechanism due to a 5% drop in KOSPI 200 futures, suspending program trading for 5 minutes. Overnight, the US chip sector also collectively slumped, with Broadcom plunging over 12%.
Notably, US AI giant Anthropic suddenly issued a warning that AI systems are progressing so rapidly that they may soon be able to self-improve without human intervention, posing significant risks to society. The company calls on global top AI labs to consider slowing development.
South Korean stock market plummets
On the morning of June 5 Beijing time, after the Japanese and Korean stock markets opened, all major indices fell sharply. As of 8:20, the KOSPI index plummeted over 6%, Samsung Electronics fell over 7%, SK Hynix plunged over 9%; the Nikkei 225 fell 1.34%.
Overnight, US chip stocks mostly declined, with the Philadelphia Semiconductor Index closing down over 2%, Broadcom plunging over 12%, Micron Technology falling over 7%, Arm down over 4%, AMD down over 3%, Qualcomm down over 2%. The storage sector also collectively fell, with SanDisk down nearly 4%, Western Digital down over 3%, Seagate down over 1%.
Broadcom's latest revenue data slightly missed market expectations, casting a shadow over the AI investment boom that had driven the market higher, causing investors to reassess whether AI infrastructure investment has already overdrawn future growth expectations.
Siebert Financial Chief Investment Officer Mark Malek said that Broadcom's performance was not bad, but previous market expectations were too full. The market no longer gives unlimited premiums to all AI-labeled companies. Demand is real, spending is real, and the opportunity remains huge, but stock prices may still run ahead of reality.
Prior to this, South Korean financial authorities had issued strong market stabilization signals. Finance Minister Koo Yun-cheol said that if necessary, measures will be taken immediately to deal with excessive fluctuations in the foreign exchange market, and focus on stock market and bond market risks, expressing concern over leveraged stock trading and preventing herding effects from amplifying market volatility.
According to Reuters, Koo held a meeting with Bank of Korea Governor Hyun Song Shin, Financial Services Commission Chairman Lee Eog-weon, and Financial Supervisory Service Governor Lee Chan-jin in Seoul on Thursday to discuss recent financial market conditions.
In a post-meeting statement, the Ministry of Finance said Koo emphasized that necessary measures will be taken immediately to deal with excessive herd behavior in the foreign exchange market. He also promised to proactively manage risks related to the domestic stock market and deal with excessive bond market volatility.
The officials believed that the recent market volatility is related to the Middle East war and continued net selling of Korean stocks by foreign investors. The Ministry of Finance said that after the sharp rise in the Korean stock market over the past year, foreign investors have undergone periodic rebalancing by taking profits to adjust positions, thereby amplifying volatility.
After more than a year of substantial gains and rapid increase in leveraged funds in the Korean stock market, regulatory concerns about overheated trading and concentrated holdings are rising.
Among them, Samsung Electronics and SK Hynix, two chip giants, account for over 40% of the weight in the KOSPI index. If the chip sector fluctuates, the index may face greater shocks.
AI giant issues sudden warning
Meanwhile, the warning from US AI giant Anthropic has also drawn market attention. The company calls on global top AI labs to consider slowing development, arguing that AI systems are progressing so rapidly that they may soon be able to self-improve without human intervention, posing significant risks to society.
On Thursday EST, Anthropic disclosed internal data on the speed of model capability improvement in a blog post, stating that being able to slow down global AI development speed may be beneficial for the world.
The article, written by the head of Anthropic's internal research institute and policy director, pointed out that current AI model progress seems to be moving toward recursive self-improvement, where AI systems can self-improve without human intervention.
Some AI industry insiders see this threshold as a potential danger signal and a point of huge social upheaval.
The article wrote: "We believe that the world would benefit from having the option to slow down or temporarily pause frontier AI development to allow social structures and alignment research to keep pace with technological progress."
The article also proposed reaching a global agreement on how to potentially slow development and establishing a verification mechanism to check whether competitors comply with the agreement.
Anthropic recently completed a financing round with a valuation close to $1 trillion and has filed confidential documents to initiate the public listing process. ChatGPT maker OpenAI is also expected to file IPO documents soon.
Since its establishment, Anthropic has taken AI safety as its core concept. However, critics have long argued that the company's policy propositions are actually using regulatory methods to restrict competitors' development speed.
Others believe that Anthropic's warnings about the dangerous potential of its own tools can also be seen as a marketing tool. These skeptics point out that Anthropic's decision to limit the release of its powerful Mythos model is a convenient way to promote its product capabilities.
Anthropic management said they take safety issues seriously and are committed to promoting more discussion on risks.
