The AI trade, encompassing semiconductor and memory stocks, is experiencing a downturn as investors question the sustainability of the recent spending surge on chips and data centers. On Tuesday, semiconductor giants like Micron Technology and Sandisk faced significant pressure, with Samsung Electronics reporting record second-quarter earnings but missing revenue estimates, leading to a nearly 7% drop in its shares. This decline extended a broader selloff among AI-linked chipmakers, fueled by concerns that hyperscalers might reduce AI infrastructure spending. Adding to the market's uncertainty, SK Hynix's shares have fallen 25% from their peak ahead of its U.S. listing, diverting investor capital from existing chip stocks. Meanwhile, China's Zhipu AI is exploring a custom AI chip, signaling a shift towards more cost-effective AI ecosystems based on domestic hardware. This development comes amid high valuations in AI-related stocks and follows SpaceX's recent IPO. As the AI trade loses momentum, there is speculation that capital could rotate back into the crypto market, which has been impacted by the AI investment trend over the past year.