Moonshot AI unveils Kimi K3 model as concerns over artificial intelligence spending bubble weigh on global stock markets

Global stock markets fell Friday as investors grew increasingly concerned that the massive spending on artificial intelligence might fail to deliver expected results. The tech-heavy Nasdaq dropped 1.4% and the S&P 500 fell nearly 1% as the AI bubble showed signs of cooling. A primary driver of the sell-off was the announcement of Kimi K3 by the Chinese startup Moonshot. The new open-source model is the world's largest of its kind and rivals the performance of leading Western models like ChatGPT. This development raised fears that Chinese competition could threaten U.S. dominance and hurt the revenue projections of chipmakers. Semiconductor stocks, which have been the primary beneficiaries of the AI boom, saw a significant slump. Nvidia fell over 2% and briefly lost its status as the world's most valuable company to Apple. Meanwhile, memory chip giants like Micron and Sandisk faced heavy losses as traders engaged in profit-taking. Additional pressure came from rising oil prices fueled by U.S. airstrikes on Iran, which stoked concerns over potential inflation.

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