When the AI Narrative Cracks: How One Open-Model Headline Reprices an Entire Sector — and the Correlation Spike That Follows
Overnight, Moonshot's Kimi K3 — a Chinese open-weight model rivaling US frontier systems — sent AI and semiconductor stocks into a third straight day of selling and revived the DeepSeek moment of 2025. The striking part isn't that chips fell; it's that a single competitive-model headline can reprice a trillion-dollar basket at once. This is why the AI trade behaves as one correlated bet, what happens to correlations when the thesis is threatened, and how to think about risk when diversification inside a theme quietly disappears.