Summary of Key Points
This article focuses on the extreme market sentiment amidst the global AI boom: South Korea has experienced a frenzy among businesses, the stock market, and the general public due to AI chips (HBM), with the government even introducing leveraged ETFs to encourage investment in AI giants. Globally, from major U.S. companies to wealthy individuals in Saudi Arabia, there is a rush to invest in AI. In contrast, sectors outside of AI have been neglected by the market, creating a stark contrast between the "AI boom" and the "non-AI slump." The article concludes by drawing a parallel with Li Ze Kai's 2000 deal to acquire Hong Kong Telecom, highlighting the current market state of "absolute optimism (for AI) and absolute pessimism (for non-AI)," suggesting that such extreme emotions may conceal potential bubble risks.
I. South Korea is Gone Wild: From Businesses to the Public, Everyone is Betting on AI Chips
The "wildness" in South Korea is a chain reaction driven by AI chips:
- Businesses are Profiting Massively: Samsung and SK Hynix, with their HBM chips (essential for large AI models and currently in high demand globally), have seen their market values exceed one trillion dollars each, and their annual profits are expected to reach hundreds of billions of yuan this year.
- Stock Market is Soaring: The South Korean Composite Index has doubled in half a year (108.85%), driven entirely by these two AI chip giants, setting new record highs.
- Employee Bonuses are Exorbitant: SK Hynix employees received bonuses exceeding 5 million yuan this year, while Samsung employees received over 3 million yuan—equivalent to several years of ordinary people's income.
- The Government is Gambling Heavily: To allow those who didn't buy stocks to benefit as well, the South Korean exchange approved 18 leveraged ETFs on Samsung and SK Hynix (allowing investors to buy two dollars' worth of stock for one dollar, doubling potential gains or losses). The ETF market size exceeded 500 trillion Korean won within two days—equivalent to the entire country betting on the future of these two companies through leverage.
II. The World is Flocking to AI: From U.S. Giants to Saudi Billionaires
AI has become a global "must-bet":
- The Top 10 Companies in the U.S. Stock Market are All AI-related: NVIDIA (AI chips), Microsoft (ChatGPT), Apple (AI-powered phones), Google (large models), etc., all relying on AI to support their market values.
- A-share Fund Managers are Shifting Investments to AI: Funds that previously invested in consumer goods and resources are now secretly buying chip and optical module companies (essential for AI data transmission).
- Countries are Collaborating on AI: Japan has brought together SoftBank, Sony, etc., to develop AI models; Saudi Arabia has invested 30 billion dollars in AI; Masayoshi Son has liquidated his holdings in Alibaba and Deutsche Telekom to invest all his money in AI, even becoming Asia's richest person again; even Buffett has "bowed down" by buying Google shares and participating in a $10 billion AI computing power financing deal.
In short, not investing in AI now is like not investing in the internet 20 years ago—you could get left behind by the market.
III. Non-AI Sectors are Completely Cold: Traditional Assets Are Becoming "Bye Bye Assets"
The brilliance of AI highlights the bleakness of non-AI sectors:
- The HALO Concept Was Short-Lived: At the beginning of the year, Wall Street suggested that scarce physical assets (such as ports and power) were worth re-evaluating, but within days, they were ignored and labeled "bye bye assets."
- Traditional Giants' Market Values Have Inverted: China Ping An (annual profit of 130 billion yuan, assets of 14 trillion) has a market value of less than one trillion, while previously obscure optical module companies (related to AI) have market values exceeding one trillion.
Market funds are all flowing towards AI, leaving non-AI sectors behind—just like how traditional industries were neglected during the internet bubble.
IV. A Historical Parallel: Li Ze Kai's "Empty Hands to Catch a Wolf" and Today's AI Bubble?
The article uses Li Ze Kai's 2000 deal as a metaphor for the current market's extreme emotions:
- That Year's "Century-Long Deal": Li Ze Kai used an almost shell internet company (Eikon Digital) with 30 billion Hong Kong dollars in leverage to acquire the profitable Hong Kong Telecom. The reason was the market's "absolute optimism" about the internet and "absolute pessimism" about traditional telecommunications at the time; he exploited this emotional disparity.
- Is Today's AI Bubble the Same?: Currently, there is "absolute optimism" for AI and "absolute pessimism" for non-AI sectors—optical module companies have market values exceeding those of financial giants, and Samsung and SK Hynix are being heavily leveraged by the public. This extreme sentiment is very similar to the internet bubble.
Yuan Tianfan (Li Ze Kai's partner) said, "Only when absolute optimism and pessimism occur simultaneously can such 'miraculous deals' happen, and this situation is rare once in a century." Is today's AI boom the beginning of another such "miracle?"
Final Conclusion
AI is currently a hot topic, but behind the extreme optimism may lie the same risks as the internet bubble: after all, there are no markets that never rise or industries that are always neglected. While ordinary people enjoy the excitement, they should also be wary of the madness of the public's leveraged bets on AI.