Shares in South Korean AI services firm Elice Group plummeted 30% in their market debut on Tuesday, amid a sharp retreat in sentiment towards the sector that has also derailed other planned listings.
Elice, which raised 201.1 billion won ($150 million) in its IPO, provides AI cloud services as well as AI-based education and business software and plans to spend most of its IPO proceeds on launching portable modular data centers and related infrastructure.
Investors are increasingly questioning whether massive AI spending can pay off anytime soon as elevated inflation keeps borrowing costs high.
Analysts noted that Elice's IPO had been priced on Oct. 6, before the recent sell-off in AI-related stocks.
"Elice's debut shows the AI infrastructure trade has moved from 'build at any cost' to 'who is paying and for how long'," said Ke Yan, head of research at Singapore-based Shenton Research.