HONG KONG, May 13 — Asian stocks fell on Wednesday as markets digested the lack of progress towards Middle East peace and setbacks that rattled the boom in AI technology.

Iran’s chief negotiator said on Tuesday that Washington must accept Tehran’s latest peace plan or face failure, after US President Donald Trump warned the truce in the Middle East war was on the brink of collapse.

Both sides have refused to make concessions and repeatedly threatened to resume fighting, but neither appears willing to return to all-out war.

Traders are now looking to China, where Trump is due to land on Wednesday, the first visit by a US president in nearly a decade, saying he expected a “long talk” with counterpart Xi Jinping about Iran.

Hong Kong, Shanghai, Taipei, Sydney, Bangkok, Manila and Kuala Lumpur were all down on Wednesday. Jakarta fell nearly two per cent as the rupiah plunged to a record low.

The conflict in the Middle East has sent energy costs spiralling.

Traffic through the Strait of Hormuz – through which one fifth of the world’s oil supplies usually pass – has virtually ground to a halt.

But oil prices cooled during early Asia trade, with the international benchmark Brent crude down 0.6 per cent to US$107 (RM420) a barrel, while US benchmark West Texas Intermediate fell 0.5 per cent to US$101 a barrel.

Samsung strike threat

Seoul showed signs of recovery after the presidential Blue House distanced itself from calls for a social tax on artificial intelligence profits.

The tech-rich Kospi had plunged five per cent on Tuesday after a top official proposed a “national dividend” to redistribute excess corporate profits from artificial intelligence.

South Korea has said it will triple spending on AI this year, aiming to join the United States and China as one of the world’s top three AI powers.

The collapse of Samsung Electronics’ talks with its largest labour union dished another blow to Seoul’s AI drive, with company shares falling as much as 6.1 per cent, Bloomberg reported.

Samsung is a major producer of chips used in everything from artificial intelligence to consumer electronics, raising the prospect that a planned walkout could cause severe disruption and losses.

The latest consumer price index data in the United States released on Tuesday confirmed that high energy prices are stoking inflation, with the index hitting a three-year high in April.

Traders will also keep an eye on Chinese internet giants Alibaba and Tencent, which are set to report results.

The two firms are racing to invest in AI but have suffered weak share performance as they struggle to keep up with US competitors.

Alibaba, the e-commerce behemoth behind shopping platforms like Taobao, is known for its open-source “Qwen” AI models – popular with programmers – while gaming and social media firm Tencent launched an AI model in 2023 and a chatbot the following year. — AFP

SEOUL, May 12 — A top South Korean official has proposed a tax on AI profits to be redistributed among society as a semiconductor boom drives massive earnings for tech giants Samsung Electronics and SK hynix.

The two South Korean firms have emerged as key suppliers of high-performance chips powering AI infrastructure globally, posting record first-quarter earnings as global demand surges.

South Korea’s benchmark Kospi has rallied over the past month, repeatedly hitting record highs and also briefly coming within a whisker of the key 8,000-point mark today.

South Korea was no longer operating as a traditional export economy and could be shifting towards a “technology monopoly economy” driven by scarcity of chips and sustained excess profits, Kim Yong-beom, senior presidential secretary for policy, said in a Facebook post late yesterday.

While the shift towards a technology-dominant economy represented “the core essence of the possibilities currently open before Korea”, Kim warned it could also deepen polarisation of society.

Kim proposed what he tentatively called a “national dividend” for socially redistributing excess corporate profits from AI technology.

Among other things, the tech tax could be used to provide startup support for young people, basic income programmes for rural and fishing communities, support for artists and stronger pensions for the elderly, he said.

“Using a portion of excess profits to ensure social stability for the current generation and mitigate transition costs is not merely redistribution, but also a type of system maintenance cost,” he said.

A global frenzy to build AI data centres has sent orders for advanced, high-bandwidth memory microchips soaring.

South Korea has said it will triple spending on artificial intelligence this year, aiming to join the United States and China as one of the top three AI powers.

Kim’s remarks came as Samsung Electronics’ labour union demanded the removal of caps on performance bonuses and called for a system allocating 15 percent of operating profit to bonuses.

The union is scheduled to hold post-mediation talks with management on Tuesday.

Calls within the country’s ruling Democratic Party to redistribute gains from the semiconductor boom have also emerged publicly.

Lawmaker Moon Geum-ju said last month that the semiconductor boom was built partly on “the sacrifice and patience of farmers and fishermen” and argued that part of the profits should be returned to rural communities. — AFP