Kospi whiplash: Can South Korea survive its own AI boom?

TOKYO — South Korea has weathered the 1997 Asian financial crisis, the 2008 Lehman shock, and the 2013 taper tantrum. Now, it faces a tougher test: surviving its own artificial intelligence boom. The last week of sharp swings in the Kospi, the country’s main stock index, put this challenge on stark display. South Korea sits at the front of a pack of economies that have bet heavily on AI-driven growth. The recent market volatility signals a growing “AI reckoning,” as investors question whether the rapid build-out in AI infrastructure and chip production can deliver profits as fast as promised. For South Korea, which relies heavily on semiconductor exports, the stakes are especially high. The economy has historically rebounded from global shocks by adapting quickly. But the AI cycle moves faster and is more unpredictable than past financial crises. The question now is whether Seoul can manage the fallout of a boom that may be cooling before it fully matures.