AI jitters hit chip stocks as chatbot privacy concerns emerge

Investor concerns regarding the longevity of the artificial intelligence (AI) spending boom have led to a significant downturn in chip stocks globally. South Korea's KOSPI index fell sharply, and major chipmakers such as Samsung, SK Hynix, and Kioxia experienced substantial declines. These market jitters are further compounded by rising competition from Chinese semiconductor firms, which are reportedly advancing their domestic chipmaking capabilities, and unease over the "circular funding" model where AI companies provide financing to one another. The apprehension intensified ahead of major tech earnings reports, with some companies seeing stock drops despite strong profits, signaling investor scrutiny over extensive AI infrastructure investments.

Simultaneously, privacy concerns surrounding AI chatbots have escalated following incidents where user conversations were publicly exposed. Recently, conversations from Anthropic's Claude chatbot appeared in Google and Bing search results due to its "share" feature, which creates public web pages of chats that were then indexed by search engines. The exposed data reportedly included sensitive information such as company documents, employee performance reviews, medical details, legal strategies, and even cryptocurrency wallet keys. This incident highlights broader privacy risks, as many leading AI companies routinely use user conversations to train their models by default, with some policies lacking transparency and offering users limited options to opt out.