Global shares are mixed after a US tech selloff as a Chinese rival joins the global AI frenzy

[January 28, 2025]  By YURI KAGEYAMA

TOKYO (AP) — Global shares were mixed in thin Lunar New Year trading on Tuesday after Wall Street’s tech superstars tumbled as a competitor from China raised doubts over the recent artificial-intelligence market frenzy.

France's CAC 40 edged down 0.2% in early trading to 7,894.05, while Germany's DAX gained 0.3% to 6,047.75. Britain's FTSE 100 rose 0.2% to 8,522.94. U.S. shares were set to trade mixed with Dow futures declining 0.2% to 44,803.00. S&P 500 futures were very slightly higher at 6,047.75.

Japan's benchmark Nikkei 225 lost 1.4% to finish at 39,016.87. Australia's S&P/ASX 200 was little changed, inching down 0.1% to 8,399.10. Hong Kong's Hang Seng rose 0.1% to 20,225.11. Markets in South Korea, Shanghai and other parts of the region were closed for holidays.

Among technology companies in Japan, SoftBank Group Corp. stock extended its losses, plunging 5%. Hitachi Ltd. lost 6%, but Fujitsu and Sony Corp. recovered. Computer chip maker Tokyo Electron sank 5.7%.

Fuji Media Holdings, rocked by a sex scandal, rose 3% after a marathon news conference overnight by its top executives that lasted more than 10 hours, in which two of them resigned to take responsibility for the scandal. Fuji's stock price has zigzagged in recent months amid Japanese magazine reports about “a problem” involving an anchorwoman and a Japanese male star. He has subsequently announced his retirement.

The shock to financial markets came from China, where an AI company named DeepSeek unveiled a large language model that can compete with U.S. giants but at potentially a fraction of the cost.

It's unclear how much DeepSeek’s announcement will ultimately shake the economy that’s built around the AI industry, from the chip makers making semiconductors to the utilities hoping to electrify vast data centers gobbling up computing power.

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Tuesday, Jan. 28, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)

It’s a sharp turnaround for the AI winners, which had soared in recent years on hopes that all the investment pouring in would remake the global economy and deliver gargantuan profits along the way. Such stellar performances also raised criticism that their stock prices had gone too far, too fast.

A small group of seven such companies has become so dominant that they alone accounted for more than half the S&P 500’s total return last year, according to S&P Dow Jones Indices. They include Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla.

Their immense sizes give them huge sway over the S&P 500 and other indexes that give more weight to bigger companies.

Markets are also awaiting earnings reports later this week from Apple, Meta Platforms, Microsoft and Tesla.

In energy trading, benchmark U.S. crude added 63 cents to $73.80 a barrel. Brent crude, the international standard, rose 73 cents to $77.81 a barrel.

In currency trading, the U.S. dollar rose to 155.66 Japanese yen from 154.51 yen. The euro cost $1.0431, down from $1.0493.

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AP Business Writer Stan Choe contributed.

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