China's Chip Breakthrough Sows Fear in AI Economy

Last week was a rollercoaster ride for investors in the AI economy as two major developments sent shockwaves through the market. On Monday, Chinese memory chipmaker CXMT debuted on the Shanghai stock market, soaring by 466% to 3.3tn yuan (£365bn) in value.

This surge was followed by news that China had developed its own tools for deep-ultraviolet lithography, a technique essential to the computer chip supply chain dominated by ASML.

The market reacted with alarm as AI-linked shares plummeted. South Korea's main share index, the Kospi, fell 11.5% on Tuesday and another 6% on Wednesday, dragged down by semiconductor maker SK Hynix and Samsung Electronics.

Nvidia, the largest listed company in the world after Apple briefly overtook it, lost more than 5% of its value by Thursday evening. However, strong financial results from Amazon and Microsoft on Friday helped calm nerves, sending Nvidia's shares creeping back up.