The hottest AI trade of 2025 is rapidly unwinding in Asia. Foreign investors pulled a record amount from South Korean and Taiwanese markets, as enthusiasm for artificial intelligence stocks collides with a new threat: oil-driven inflation.
THE NUMBERS
South Korea saw $13.7 billion in outflows in a single month — a record. Taiwan saw $3.6 billion sold in a single week — worst since December. Total capital flight exceeded $16 billion from Asia’s AI-heavy markets. These aren’t small moves. This is a fundamental repositioning by global institutional investors.
WHY IT’S HAPPENING
Two forces are colliding. First, AI trade euphoria has run its course in Asia. Samsung, TSMC, and SK Hynix saw massive inflows in 2025 on AI chip demand. Those bets are now being taken off the table. Second, oil near $110 per barrel is reigniting inflation fears. Higher inflation means higher rates, which means lower valuations for growth stocks.
THE BIGGER PICTURE
The AI trade isn’t over. But the easy money phase — where anything with “AI” in its description went up — is clearly ending. What comes next is a more selective market that rewards real AI revenue over AI promises.
Stay ahead of the markets.
— AI Capital Wire Team