Billionaire Ken Griffin's rescue of hedge fund Situational Awareness helped trigger a relief rally in global AI stocks, leaving traders debating if the worst is over or more blowouts are on the way. South Korea's Kospi Index surged a record 18% following a three-day selloff, its Taiwanese peer rose 8%, and Japan's Nikkei 225 climbed 4%, while a closely-watched US gauge of semiconductor giants posted its biggest advance since April 2025. The forced liquidation of Situational Awareness's AI investments, which saw its assets plunge from $45 billion at the start of July to about $10 billion, helps explain the pressure in July where one wave of selling ricocheted around the world. The Philadelphia Semiconductor Index is down more than 20% for the month, its worst performance since the global financial crisis, and the Kospi is poised to end the month 22% lower, dragged down by SK Hynix Inc. and Samsung Electronics Co. Some market participants see a reprieve in the selling, but comparisons were made to the 1998 collapse of Long-Term Capital Management and the 2008 financial crisis, with investors questioning whether other over-levered funds with similar AI concentration exist.
SK Hynix Inc
Samsung Electronics Co Ltd
JPMorgan Chase & Co