Speaking at a forum in Seoul, Chey addressed concerns over lofty AI valuations, noting that while stock prices have surged too quickly, the underlying industry remains fundamentally sound.
“I don’t see a bubble in [the AI industry],” Chey said when asked by the Bank of Korea governor. “But when you look at the stock markets, they rose too fast and too much, and I think it is natural that there could be some period of corrections.”
Chey described the current surge in AI stock prices as “overshooting,” a common phenomenon in growth industries. He emphasized that AI development will drive significant productivity gains, even if market valuations temporarily exceed fundamentals.
SK Hynix Riding the AI Wave
Shares in SK Hynix, which produces high-end memory chips used in Nvidia’s AI chipsets, have surged 214% over the past year, fueled by strong demand from AI data center builders investing trillions of dollars.
The company reported record quarterly profits in October, driven by the AI boom, and announced that it has sold out all its chip production for next year, signaling the continuation of an extended chip “super cycle.”
Chey’s comments reflect a broader market debate over the pace of AI investment, stock valuations, and when the massive capital flowing into AI will translate into tangible profits. Analysts view the sector as a long-term growth story, even as short-term corrections in share prices may occur.