Nvidia's $750 billion in deals trigger Asia tech stock selloff

Asia tech stocks fell Monday as Nvidia's $750 billion in deals revived circular AI fears and a Chinese firm began mass-producing DUV chipmaking machines.

"The sheer scale of Nvidia's financing arrangements is forcing investors to question how much of the AI infrastructure buildout reflects genuine demand versus capital recycling," said Sarah Lin, equity strategist at Edgen. "When a chipmaker is also the financier, the revenue quality becomes harder to assess."

The selloff swept across Asian markets, with semiconductor and AI-related stocks bearing the brunt. Apple overtook Nvidia as the world's most valuable company during the rout, according to Bloomberg data. The shift in market capitalization rankings highlighted growing investor unease about the sustainability of AI-driven valuations that had propelled Nvidia to a $5 trillion market capitalization in late 2025.

Nvidia's partnership with South Korean conglomerate SK Group, unveiled late Friday, means the companies will do more than $500 billion in business with each other, Nvidia said. The chipmaker is also in talks to backstop as much as $250 billion to help OpenAI lease computing power from a US data center project, in what would be among its biggest financing deals with a customer. The arrangements follow a pattern that skeptics have warned is artificially inflating demand and valuations across the AI industry, according to Bloomberg.

The second catalyst came from China, where a state-backed company has begun mass-producing deep ultraviolet lithography machines, according to reports. The development threatens the market position of established chip equipment makers in Japan, the Netherlands and elsewhere, and adds to the pressure on Asian tech supply chains already grappling with US export controls. Japanese semiconductor equipment stocks were among the hardest hit, as investors priced in the risk of reduced demand for lithography systems from Chinese foundries that could now source machines domestically.

The selloff extended across related assets, with the Japanese yen strengthening against the dollar as investors rotated toward defensive positions. South Korea's Kospi index declined, weighed down by memory chip makers with exposure to both Nvidia's supply chain and the Chinese equipment market. Taiwan's benchmark also fell, as contract chipmaker TSMC faced dual pressure from potential demand softness and increased Chinese competition in mature-node manufacturing.

The dual shocks could lead to sustained pressure on Asia semiconductor and tech stocks, as investors reassess revenue quality at companies with exposure to Nvidia's financing network and the competitive threat from Chinese domestic chipmaking capability. The selloff also tracked Wall Street's overnight session, where technology shares declined as the circular financing debate intensified. The next catalyst for the sector will be Nvidia's quarterly earnings, expected in August, which will provide the first detailed look at how the company accounts for its growing role as both chip supplier and financing partner.

This article is for informational purposes only and does not constitute investment advice.