Asia shares lower after sharp Wall Street losses on AI-related worries

Tokyo’s Nikkei 225 fell 1.2% to 56,941.97. SoftBank Group, which has a focus on AI, lost 8.9% even after the company reported a $1.6 billion quarterly profit Thursday building on its investments in OpenAI, among other gains.

South Korea’s Kospi was down 0.3% to 5,507.01 despite earlier gains. Samsung Electronics, the country's largest listed company, was up 1.5%.

Hong Kong’s Hang Seng fell 1.7% to 26,575.84. The Shanghai Composite index was down 1% to 4,091.65.

In Australia, the S&P/ASX 200 traded 1.4% lower at 8,917.60.

On Thursday, Wall Street saw sharp losses as AI worries dampened sentiment. The S&P 500 fell for its second-worst day since Thanksgiving, dropping 1.6%, or 108.71, to 6,832.76, but it's still near an all-time high that was set last month. The Dow Jones Industrial Average was down 1.3%, or 669.42, to 49,451.98. The Nasdaq composite lost 2%, or 469.32, to 22,597.15.

American technology giant Cisco Systems sank 12.3% even though it reported better-than-expected quarterly results, as investors were concerned about its ongoing profitability.

Shares of technology company AppLovin plunged 19.7% despite better-than-expected quarterly profits as worries over AI undercutting its business weighed on its stock price.

Fears of AI disruptions across industries in recent days have hit investor confidence in companies, especially in software stocks. Some analysts say uncertainties surrounding the AI disruption risk are likely to go on for a while. Many remained concerned about whether massive AI investments by companies will eventually pay off.

But other analysts are more optimistic. Economists at Capital Economics, for example, argue that they still believe in the AI rally, and that this year will be a “good year” for the S&P 500, building on the technology-led gains.

“Our sense remains that a sustained reversal of tech outperformance would require a big slide in tech itself,” Thomas Mathews, head of markets for Asia Pacific at Capital Economics wrote in a recent note. “We think tech will fare very well.”

For other U.S. stocks, McDonald’s was up 2.7% following stronger-than-expected profits. Walmart gained 3.8%.

Investors and economists are also paying close attention to the U.S. inflation data set to be released Friday, which could impact on the Federal Reserve’s interest rate moves. Some economists expect the likelihood of another rate cut is low for the next few months.

In other dealings early Friday, U.S. benchmark crude oil lost 0.1% to $62.75 a barrel. Brent crude, the international standard, fell less than 0.1% to $67.46 per barrel.

Gold and silver prices gained. The price of gold — which earlier fell back below $5,000 per ounce — was up 0.4% to $4,970.30. The price of silver rose 1% to $76.45 per ounce.

The U.S. dollar rose to 153.38 Japanese yen from 152.72 yen. The euro was trading at $1.1857, down from $1.1871.