The global semiconductor sector has experienced a significant selloff, resulting in a loss of approximately $500 billion in market value. This downturn is primarily attributed to mounting concerns over the high valuations of leading companies within the artificial intelligence industry. Analysts and market observers have confirmed that fears regarding inflated AI-related stock prices have driven investors to reduce their holdings in chip manufacturers. The selloff reflects broader apprehensions about the sustainability of current market levels amid rapid technological advancements. Multiple sources corroborate that the valuation worries are central to the decline, underscoring the close link between AI sector performance and semiconductor stock prices. This development highlights the volatility inherent in technology-driven markets, especially when investor sentiment shifts. Overall, the semiconductor selloff illustrates the challenges faced by companies positioned at the intersection of AI innovation and capital market expectations.