South Korea has emerged as a major hub of the global AI boom, driven by Samsung Electronics and SK Hynix, which dominate high-bandwidth memory chips essential for AI systems. The surge has attracted foreign investment and pushed the KOSPI higher, while 14 million retail investors, known as “ants,” have increasingly invested in AI-related stocks, often using leveraged ETFs and borrowed money.
However, concerns are growing that the rally could be a bubble. A stronger US dollar, geopolitical tensions and foreign capital outflows have increased market volatility, while Samsung and SK Hynix account for more than half of the KOSPI, according to The Robin Report. Any slowdown in global AI spending could therefore trigger sharp losses in Korean stocks and hurt the wider economy.
The volatility highlights South Korea’s exposure to global markets despite its strong technology sector. A weaker won could boost exports and tourism but also raises the cost of imported energy and materials, leaving the country caught between its AI ambitions and growing financial risks.
