World shares were mostly lower on Friday, with Tokyo’s Nikkei 225 losing 4% as heavy selling of computer chipmakers and other AI-related shares dragged markets lower.

South Korean markets were closed, but shares in Taiwan fell 6.5% a day after its TSMC, the world’s biggest contract manufacturer of computer chips, announced it plans to spend an extra $100 billion on building fabrication plants in the U.S.

TSMC dropped 7.3% on Friday.

In early European trading, Germany’s DAX dropped 0.6% to 24,774.69 and the CAC 40 in Paris fell 0.7% to 8,318.74. Britain’s FTSE 100 edged 0.1% lower to 10,560.93.

The future for the S&P 500 declined 0.8% while that for the Dow Jones Industrial Average was 0.6% lower.

Stocks related to artificial intelligence have been under pressure for weeks because of worries that their prices have shot too high and that voracious demand for computer memory and processors may not be sustainable if AI ends up not producing as much profit and productivity as promised.

The announcement of a new Chinese open-sourced AI model by startup Moonshot, Kimi K3, further shook up markets. Similar to when China’s DeepSeek announced its AI model in early 2025, another low-cost rival to big Western AI models like ChatGPT and OpenAI could potentially hurt demand for computer chips and other components that have greatly benefited from rapid adoption of AI.

In other Asian trading, the Nikkei lost 4% to 64,141.12, at times trading near its lowest level in over a month, as shares in memory maker Kioxia slumped 16.1%.

Computer chip equipment maker Tokyo Electron sank 8.2%. Chip testing equipment maker Advantest tumbled 7.2%.

SoftBank Group, which has invested tens of billions of dollars in AI-related businesses, shed 9%.

The Hang Seng in Hong Kong gave up 2% to 24,505.38, while the Shanghai Composite index lost 3.1% to 3,764.15, dipping to its lowest level in nearly 11 months.

Hong Kong-trade shares in Knowledge Atlas Technology Joint Stock Co., Ltd., branded internationally as Z.ai and previously known as ZhipuAI, tanked 28.5%.

In Australia, the S&P/ASX 200 declined 0.5% to 8,796.70.