South Korea’s AI sell-off shows how quickly market optimism can turn

South Korea’s AI sell-off shows how quickly market optimism can turn

The South Korean stock market has plunged almost 40 per cent over the last few weeks, wiping billions from investor wealth. An RMIT expert says the sell-off is a stark reminder that market enthusiasm for AI can quickly outpace economic reality.

Professor Angel Zhong, School of Economics, Finance and Marketing:  

"What we're seeing in South Korea is a reminder of how quickly technology narratives can translate into market enthusiasm, and how quickly that enthusiasm can reverse. 

"The AI revolution is creating genuine economic opportunities, but markets often price in expectations long before those benefits are fully realised. 

"When investors become heavily concentrated in a single theme, whether that's AI infrastructure, semiconductors or any other high-growth story, valuations can drift away from underlying fundamentals. 

"The key takeaway is not the decline in share prices, but how leverage amplified both the gains and the losses. 

"Investors should be careful not to mistake a correction in market sentiment for a failure of underlying technology. AI will continue to transform industries, but markets often move through cycles of exuberance and reassessment. 

"Financial literacy is more important than ever in an environment where technology, social media and low-friction trading platforms can rapidly draw investors into speculative trends." 

Dr Angel Zhong is a Professor of Finance, specialising in global financial markets, behaviour and trends. 

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General media enquiries: RMIT External Affairs and Media, 0439 704 077 or news@rmit.edu.au

03 August 2026

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03 August 2026

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