Global technology stocks sold off sharply Thursday, as a growing list of worries, including rising borrowing costs and tougher competition from China, caused traders to sour on AI investments.

Nasdaq futures were down 1.1% shortly after 6.30 a E.T. The tech-heavy index posted its worst decline since July on Wednesday, as shares of companies involved in the AI buildout, including chipmakers, tumbled.

CoreWeave, a data center provider backed by Nvidia, fell 6% in premarket trading, after plunging 15.5% Wednesday. Oracle fell more than 2% premarket, having closed nearly 9% lower Wednesday. Intel, SpaceX and Nvidia were also poised to open sharply lower.

“Worries about the AI buildout, bubbly valuations, lower-than-expected earnings growth at leading US frontier labs, Chinese competition, inflation and rates sent investors running for the covers,” Neil Wilson, a strategist at investment bank Saxo wrote in a note. He pointed to the slowing pace of revenue growth at Anthropic and OpenAI as adding to investor concerns.

Multiple news outlets reported that Anthropic, at an investor presentation ahead of its planned IPO expected in the near future, announced its sales grew 45% to $17 billion last quarter. Growth had more than doubled in the second quarter.

Further hitting sentiment, C.C. Wei, the CEO of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest manufacturer of advanced chips, sounded a cautious note during an earnings call Thursday.

He told analysts that rising component prices and macroeconomic uncertainty was challenging demand in some segments of the market.

The company’s shares finished 2% lower despite bumper earnings, contributing to a 3.5% decline in an index of Taiwan’s technology stocks. South Korea’s Kospi led declines in Asia, finishing 7.6% lower on sharp drops in chipmakers SK Hynix (-11%) and Samsung Electronics (-9.5%). The scale of the decline triggered a circuit breaker, temporarily halting trading on the exchange – a frequent occurrence this year in a stock market dominated by just two stocks.

Japan’s Nikkei finished 4.9% lower, with Hong Kong’s Hang Seng down 1%.

An index of technology stocks in Europe fell 3% in early afternoon trade locally, with Dutch semiconductor manufacturer ASML down nearly 5%. The global retreat in technology stocks followed a sharp selloff overnight on Wall Street, after a strong US inflation print bolstered worries that rising interest rates will make it more expensive for companies to fund AI investments. Many AI companies are already heavily indebted.

“A slowdown in the AI infrastructure build out would imply a sharp slowdown in US growth expectations,” Mohit Kumar, chief European economist at Jefferies said in a note. The US is spending more on AI annually as a percentage of GDP than it did on building railways across the country in the 1800s, he noted.

AI stock valuations have been volatile throughout the year. The biggest hyperscalers – Anthropic and OpenAI – remain privately traded, so investors look for clues about AI demand elsewhere. One report that hints about slumping demand or higher-than-expected costs of building out AI infrastructure has frequently sent stocks on a rollercoaster ride. But fears of a bubble suddenly popping have tended to be overblown.

“We expect the earnings season to justify that earnings and demand remain robust,” Kumar added. He cautioned, however, that Jefferies “would look to take some chips off the table” ahead of the midterms because a potential Democrat win in Congress “would be considered negative for the sector.”Adding to market jitters is growing competitive pressure from China, after Chinese semiconductor CXMT announced progress on advanced memory chips, raising doubts about the potential profitability of companies in the US and South Korea.