South Korean Stock Sell-Off Puts AI and Leverage Risks in Focus

South Korea’s stock sell-off has deepened scrutiny of the AI boom and leveraged trading. The KOSPI fell nearly 32% from its June peak, with Samsung Electronics and SK Hynix shares weakening as investors questioned whether memory-chip prices and AI-related earnings can sustain their momentum. On 12 October, the index dropped 3.65% to 6,384.25, while the two chipmakers fell 4.39% and 4.52%. Investors are weighing rising production costs and major investment plans against uncertain returns. Samsung has earmarked more than 110 trillion won for capital spending and research in 2026, and SK Hynix is expanding high-bandwidth memory capacity. ASML has also said replacement parts for equipment supplied to the companies will cost 10% more from January 2027. Reports placed OpenAI’s annualised revenue near $50 billion at the end of September, below some estimates of $68 billion to $70 billion, although later reports suggested it could reach at least $70 billion by year-end. The figures highlight uncertainty around AI revenue estimates, not clear evidence that cloud providers are cutting investment. Foreign investors reportedly sold nearly 2 trillion won of South Korean shares on 12 October, with net outflows reaching 29.7 trillion won over the prior month. Leveraged positions could intensify volatility if falling prices trigger margin calls and forced selling. For traders, the South Korean stock sell-off is a signal to watch chip earnings, memory pricing, AI companies’ revenue and spending, foreign fund flows and leverage. It does not directly establish a price outlook for any cryptocurrency.