Tech Stocks Tumble on Worries Over A.I. Spending and China’s Chips

A global technology stock sell-off intensified on Tuesday, underpinned by worries over hefty bills for the build-out of artificial intelligence systems and concerns over tougher competition from China.

The Nasdaq Composite index, chock-full of big technology companies, came close on Tuesday to falling into correction, Wall Street’s term of a drop of 10 percent or more from its recent peak, before rebounding and ending the day down just 0.2 percent.

Still, the slide among top chipmakers remained. The American chip company Micron declined more than 8 percent on Tuesday, as did Advanced Micro Devices. Nvidia, the leading chipmaker, nudged lower before turning higher, but it remains more than 15 percent below its peak in May. SpaceX, Elon Musk’s rocket and A.I. company, also rebounded from an early morning slide. The stock remains more than 40 percent below its June peak.

The bumpy sell-off has taken hold over the past month, as fears about the ballooning spending by big technology companies on A.I. infrastructure and the threat of cheaper competitors undermining it have come to the fore. Cheaper A.I. models threaten the dominance of a handful of U.S.-listed companies, while competition from China has loosened South Korea’s grip on the market for memory chips critical to artificial intelligence.

On Tuesday, South Korea’s benchmark KOSPI index plunged nearly 11 percent, at one point triggering a temporary trading halt. The index has lost a third of its value over the past month but remains more than 40 percent higher for the year because of the soaring rally that preceded the drop. Benchmark indexes in Japan and Taiwan both fell around 4 percent. Stocks in China fell more than 2 percent.

The drop in Asia spread to American exchanges. The Nasdaq 100 index, which strips out banks from the broader index, making it further dependent on big tech companies, fell 1 percent, ending the day almost 10 percent below its peak in June.