South Korea's KOSPI benchmark dropped almost 4% on Wednesday as a selloff in artificial intelligence stocks intensified, with data centre company Elice plunging about 30% in one of the country's weakest IPO debuts on record. The declines came as market jitters persisted and investors pulled back from AI-linked names.
The Elice plunge
Elice, which operates data centre infrastructure tied to AI workloads, fell roughly 30% on its first day of trading. The drop ranks among the worst debut performances for a South Korean listing. The company's shares opened sharply lower and never recovered, according to market data.
The weak debut underscores how quickly sentiment has turned against AI-related businesses. Elice's core business — providing computing capacity for AI development — had been seen as a beneficiary of the AI boom. On Wednesday, that narrative worked in reverse.
AI stocks lead the retreat
The KOSPI's near-4% decline was broad but led by technology and AI-adjacent names. The selling accelerated through the session as investors reduced exposure to companies tied to artificial intelligence infrastructure and services.
There was no single catalyst cited for the move. Instead, the decline reflected a growing unease among market participants about stretched valuations in the AI sector and the pace of real-world adoption. The KOSPI's drop followed similar weakness in other Asian markets earlier in the week.
Jitters persist
Market jitters showed no sign of easing by the close. Traders described thin liquidity and a reluctance to buy the dip, particularly in newly listed AI names. The KOSPI has now given back a significant portion of its recent gains, though the index remains above its lows from earlier this year.
Elice's 30% fall is likely to weigh on the pipeline of AI-related IPOs in South Korea. Bankers and company executives had been preparing several listings tied to data centres, chips, and AI software. A debut that loses nearly a third of its value in a single session sends a clear signal about investor appetite.
What to watch
Attention now turns to the next batch of AI earnings and guidance from major South Korean technology firms, which could either stabilise sentiment or deepen the selloff. Elice's lock-up expiry — typically six months after listing — will be a key test of whether institutional investors stay or head for the exits. For now, the KOSPI's AI trade is under pressure, and the market is watching for signs of where the bottom might be.
