AI boom reshapes emerging markets: Korea and Taiwan now dominate

Just over a year ago, mainland China and India together made up 50 percent of the MSCI Emerging Markets Index. Today, that balance has shifted dramatically. South Korea and Taiwan now account for more than half of the benchmark. At the end of last month, South Korea’s weight in the index stood at nearly 24 percent—four percentage points higher than its previous share. The change reflects a surge in demand for technology stocks tied to artificial intelligence, as investors pour capital into markets that produce semiconductors and advanced electronics. This rapid rebalancing highlights both opportunity and risk. While capital flows boost local economies, they also expose emerging markets to sudden shifts in global tech sentiment. For now, the AI trade is rewriting the rules of emerging-market investing.