Kospi falls about 4%, Elice shares lose 32% amid AI concerns

Key Facts

South Korea's Kospi index fell about 4% in the 20 October 2026 session, according to CoinDesk, as a selloff in AI-linked stocks continued. In Seoul, shares of AI infrastructure company Elice dropped 32% on their first day of trading, according to Investing's coverage, adding the company's listing to the sector's turmoil. The losses came as investors focused on cloud computing providers' financing costs and debt levels, alongside the profitability of their capital-intensive expansion plans, according to CoinDesk. The decline spread across regional markets, with the MSCI Asia ex-Japan index falling 0.93% during Tuesday's session, according to a Reuters update. Japan's Nikkei index fell 1.28% in the same update as investors awaited results from major AI-linked companies.

Elice had raised 201.1 billion won, equivalent to $150 million, in its initial public offering, according to Reuters, before its shares fell at the start of trading. The IPO was priced on 6 October, before the latest selloff in AI-linked stocks that surrounded the shares' market debut. Institutional demand reached about 388.84 times the shares available to institutions, according to Investing, reflecting strong interest during the subscription period before the shares began trading. Retail investors also subscribed for 408.26 times the shares allocated to them, according to the same source, alongside institutional demand for the Korean company's shares. The retail offering attracted deposits exceeding 10 trillion won, bringing the subscription period to a close with strong demand followed by losses in the shares during their listing session.

Elice's offering followed an increase in revenue to 3 times its year-earlier level, reaching 34 billion won in the first half of the year, according to Reuters. The company posted an operating profit of 10 billion won during the same period as its AI infrastructure business expanded. Elice plans to expand its domestic infrastructure using modular data centers, according to a company statement on its plans to develop its business in Korea and abroad. It said in the statement: "Elice will accelerate its entry into overseas markets while expanding domestic AI infrastructure based on modular data centers." The company's stated strategy combines domestic expansion with entry into overseas markets at a time when investors' concerns about the sector center on financing expansion and its profitability, according to CoinDesk.

Concerns surrounding AI cloud computing providers include borrowing costs as well as rising debt levels, according to CoinDesk's coverage of the turmoil in the sector's shares. These concerns extend to the ability of capital-intensive expansion plans to generate profits as spending on the infrastructure required for computing continues. CoinDesk described the areas of concern as "borrowing costs, elevated debt levels, and the profitability of capital-intensive expansion plans" in its account of the factors weighing on investors. Among major companies, Reuters cited Goldman Sachs as forecasting that combined capital expenditure by AI cloud infrastructure companies would rise to about $1.2 trillion the following year. The estimate covers 5 major companies, including Meta, whose results investors are awaiting as they track the performance of companies linked to the sector.

Elice's listing comes amid a selloff in AI-linked stocks that followed the pricing of the company's IPO, according to Reuters' chronology of the offering. Meanwhile, investors' attention to major companies centers on upcoming financial results, according to the agency's report on Asian market trading on Tuesday. Meta was among the companies Reuters identified as the next near-term catalyst for tracking the performance of AI-linked businesses as its earnings announcement approached. The company is also part of the capital expenditure group covered by Goldman Sachs' estimate, amid plans to expand cloud infrastructure. Attention to these results is intertwined with the concerns over the profitability of capital spending reported by CoinDesk, as the sector's shares face selling pressure across markets.

Looking ahead, Reuters said in its report published Tuesday that Meta's results were expected on Wednesday, making them the next imminent announcement from major AI-linked companies. In South Korea, the Bank of Korea's official calendar sets 27 October local time for the release of consumer confidence and gross domestic product data. The consumer confidence index is due at 06:00 Korean time, among the upcoming economic data the market is awaiting after the selloff. It will be followed by the release of annual and quarterly GDP growth data at 08:00 local time, according to the central bank's calendar. Both releases fall on the evening of 26 October in Coordinated Universal Time, while their local publication date in South Korea remains 27 October.