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SK Group CEO Warns AI Stocks May Correct, Yet Industry Is Not a Bubble

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  Published in Stocks and Investing on Friday, December 5th 2025 at 4:33 GMT by Channel NewsAsia Singapore

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SK Group’s CEO Warns AI Stocks May Correct, but the Industry Is Not in a Bubble

Channel NewsAsia – 5 Dec 2025

In a recent interview with Channel NewsAsia, SK Group’s Chief Executive Officer, Mr Kim Jung‑hun, cautioned that while the artificial‑intelligence (AI) sector is still experiencing a surge of optimism, the current price rally is not a “bubble” and that AI‑related stocks could still face a correction. The comments come at a time when the AI market is at the centre of investor attention, with AI‑enabled companies—especially chip makers, cloud providers and software developers—boasting record valuations.

The AI Boom – A Quick Recap

The past year has seen an unprecedented acceleration in AI technology, driven largely by the advent of large‑language models (LLMs) such as GPT‑4 and its successors. The growth of these models has spurred demand for specialised hardware, particularly graphics processing units (GPUs), tensor‑processing units (TPUs) and high‑bandwidth memory. Key players—NVIDIA, AMD, Micron, TSMC, and newer entrants like Graphcore and Cerebras—have seen share prices jump 50 %–80 % in the first half of 2025.

In parallel, cloud giants such as Amazon, Microsoft, and Google are investing billions in AI infrastructure, while new AI‑as‑a‑service platforms have emerged across the globe. As a result, the total global AI market is projected to reach USD 1.5 trillion by 2030, according to a recent McKinsey report referenced in the article.

SK Group’s Strategic Position in AI

SK Group, a South Korean conglomerate with a diversified portfolio that includes SK Hynix (semiconductor), SK Telecom (telecom), and SK Innovation (energy), is heavily invested in the AI ecosystem. SK Hynix has launched its “AI‑Optimised” memory line, designed to deliver lower latency for inference workloads. SK Telecom is rolling out AI‑powered 5G services to enterprises and has partnered with AI start‑ups to build data‑driven network management solutions.

SK Innovation, meanwhile, is looking at AI applications in the energy sector, exploring smart grid optimisation and predictive maintenance for power plants. “We’re not simply a passive observer; we’re actively shaping how AI is embedded into every part of our businesses,” Kim Jung‑hun said.

Why the AI Industry Is Not a Bubble

Despite the bullish sentiment, Kim argued that the AI industry is underpinned by fundamental growth drivers. “The demand for AI isn’t a speculative trend; it’s a technology that is increasingly integrated into everyday business processes—from supply chain optimisation to customer experience,” he said. He pointed to the fact that large corporations are now spending an estimated USD 250 billion on AI in 2025, up from USD 140 billion in 2023, according to IDC data.

Moreover, the supply chain of AI chips has matured. TSMC and Samsung have announced multi‑year commitments to build new fabs that will produce 3nm and 2nm nodes, crucial for next‑generation GPUs and AI accelerators. SK Hynix’s investment in high‑bandwidth memory for AI workloads demonstrates that memory manufacturers are also playing a pivotal role. “These are not just speculative bets,” Kim emphasised. “We’re seeing tangible, repeatable revenue streams that will continue to grow.”

The Risk of a Market Correction

Nonetheless, the CEO did not dismiss the possibility of a market correction. He highlighted that valuations of AI‑related companies have surged far beyond their current earnings multiples. “If the market overestimates the near‑term profitability of these companies, we could see a pullback,” Kim warned. He cited the recent 20 % drop in NVIDIA’s stock after a mid‑quarter earnings miss as an illustration.

Kim also pointed out that the AI industry faces regulatory uncertainties, particularly around data privacy and the ethical use of generative models. “Regulation can act as a headwind, slowing adoption rates and thereby impacting valuations,” he noted. He urged investors to pay close attention to how AI companies manage data governance and comply with emerging regulations in the EU, US, and Asia.

The Take‑Away for Investors

The article concluded with a set of practical insights for investors:

1. Focus on Fundamentals – Companies with robust revenue pipelines and proven AI solutions are more likely to sustain growth than those that rely solely on hype.
2. Diversify Across the Supply Chain – Investing in memory suppliers (e.g., SK Hynix), fab‑less chip designers (e.g., AMD), and foundries (e.g., TSMC) can provide exposure to different segments of the AI ecosystem.
3. Watch for Regulatory Developments – Keep an eye on data‑privacy laws, AI‑ethics guidelines, and potential subsidies that could shift the competitive landscape.
4. Long‑Term Horizon – AI is a technology that matures over time. Short‑term price swings may not reflect long‑term fundamentals.

In closing, Kim Jung‑hun said, “AI will continue to be a cornerstone of future growth. The challenge is to navigate the price volatility and ensure that we invest in companies that deliver real, sustainable value.” This balanced view underscores that while the AI sector is not a bubble, vigilance is still warranted in a rapidly evolving market.