Nvidia's AI Bubble Fears Shake Global Market Rankings

The global market capitalization rankings have seen significant swings in recent weeks due to concerns over an artificial intelligence (AI) circular financing bubble. In July, Nvidia briefly lost its top spot as the largest company by market cap to Apple, with Samsung Electronics and SK hynix also falling in the rankings.

According to CompaniesMarketCap, as of August 3rd, Samsung Electronics' market capitalization was $1.1 trillion (about 1,500 trillion won), ranking 13th globally. SK hynix's market cap was $778.5 billion (about 1,108 trillion won), slipping one notch to 19th.

The shift in the market-cap landscape stems from mounting doubts about the semiconductor cycle. Despite posting record operating profits, Samsung Electronics and SK hynix face skepticism over whether today's high prices can be sustained as AI big tech corporations' cash capacity gets stretched.

Controversy over 'AI circular financing' centered on Nvidia has dampened investor sentiment, with concerns growing over whether a structure in which AI corporations boost their size by exchanging investments and sales among themselves is sustainable. Credit default swap premiums for global big tech have surged to record highs, increasing the capital-raising expense burden.