AI Revolution is Real, Market Lacks Confidence: S. Korean Advisor

South Korean Presidential Economic Advisor Kim Yong-beom asserted that the ongoing artificial intelligence revolution is genuine, suggesting that market and investor uncertainty stems from a lack of conviction about its trajectory. Speaking on July 28, Kim addressed the recent stock market fluctuations, particularly concerning single-stock leveraged ETFs, acknowledging that the volatility is a significant concern for investors.

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The AI revolution is real. It's just that the market or investors are less confident about the AI revolution progressing.

Kim noted that the past few months have seen widespread debate about the future of semiconductors and AI stocks globally. He linked the recent drop in the KOSPI to events like the Shanghai listing of China's CXMT, likening the situation to past market shocks. Despite these concerns, Kim expressed confidence in the sustained demand for AI-related products, stating that he does not believe their utility is temporary.

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I do not think the actual demand or the use of AI is temporary. Demand is expected to continue strongly.

To address investor anxieties, Kim indicated that the Financial Services Commission plans to comprehensively review structural factors, not limited to leveraged ETFs. He added that the market is currently in a process of finding a new equilibrium. The comments were made during a briefing on the results of a South Korea-Brazil business roundtable, held during President Lee Jae-myung's state visit to Brazil.

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It is a process of finding some balance point.