A sharp sell-off in global AI and semiconductor stocks sent South Korea’s KOSPI tanking more than 6% on Tuesday and dragged Asian equities to a more than two-month low, as intensifying competition in the AI sector weighed on investor sentiment.

The weakness spilt over into Indian stocks linked to artificial intelligence and energy infrastructure, with Hitachi Energy India , E2E Networks , Black Box , Orient Technologies and Anant Raj sinking by up to 5.5% during intraday deals.

Hitachi Energy India shares fell as much as 5.46% during the session. At 1:54 pm, the stock was at Rs 29,925 apiece on the NSE, down 4.36% from its previous close.

E2E Networks was trading at Rs 706.20, down 4%, while Black Box declined 1.51% to Rs 910.60 apiece. Orient Technologies was quoted at Rs 227.48, down 0.98% from its previous close, while Anant Raj was trading at Rs 559.50, lower by 1.76% on the NSE.

The weakness extended to the broader energy segment, with the Nifty Energy index down 0.42% at 35,705.80.

The decline in Indian AI- and energy-related stocks came amid a sharp sell-off in Asian technology shares, particularly semiconductor makers, as investors reassessed the outlook for AI-related investments amid intensifying competition.

Selling in South Korean chipmaker shares extended into a fifth consecutive session on Tuesday, with losses accelerating sharply. The KOSPI fell more than 6%, marking its steepest one-day decline since July. Japan's Nikkei declined 2.6%, while Taiwan's stock market dropped 2%.

The KOSPI, a key market in the global AI boom, is on its longest losing streak in more than two years and has fallen around a quarter from its July highs. The downturn follows a prolonged market rout triggered by a sell-off in leveraged positions in July.

Meanwhile, Shanghai's technology-focused STAR Market has lost more than a third of its value from its July peaks.

MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 2% to its lowest level since late July. Nasdaq futures were down 0.77%, while European equity futures slipped 0.2%.

Among individual stocks, Samsung fell 8%, and SK Hynix dropped 10%. Taiwan Semiconductor Manufacturing Company (TSMC) declined 1.8%, while Japan's Kioxia Holdings slid as much as 14%. SoftBank, an investor in AI-related businesses, was down 8%.

The sell-off followed a sharp decline in US chipmaker shares after reports of rapid technological progress by Chinese rival ChangXin Memory Technologies (CXMT) raised concerns that Chinese companies could be closing the technology gap.