Japan's Nikkei share average closed 4% lower on Friday, erasing most of the gains from the previous session, as tech investor SoftBank Group tumbled more than 12% after a report of a delay in OpenAI's initial public offering.
The Nikkei fell 4.15% to close at 69,360.88. In the previous session, the benchmark index rose 4.6% to close at a record high.
The index dropped 2.65% for the week.
The broader Topix closed 1.32% lower to 3,963.36 and slipped 2% for the week.
Technology investor SoftBank, whose share price has been boosted by CEO Masayoshi Son's bet on OpenAI, fell 12.53%.
OpenAI is considering holding off on its public debut until next year, the New York Times reported on Thursday, citing three people involved in the company's deliberations.
"The news was negative for SoftBank Group as well as overall investors as AI is the centre of the market and the market wondered if there was anything negative in the industry outlook," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
Other AI-related heavyweights fell, with shares of Advantest and Tokyo Electron down 9.64% and 3.21%, respectively.
Memory maker Kioxia fell 11.24%.
The sharp decline in the Korean benchmark KOSPI, which triggered circuit breakers for the second time this week, also hurt investor sentiment, said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.
But strategists see the Nikkei's rally will continue, as investors will keep broadening their targets in AI data centre and chip-related stocks.
"AI and chip-related shares have been volatile in recent sessions, but in the long term, their stock prices will be firm, supported by solid earnings," said Chizuru Morishita, researcher at NLI Research Institute.
"The AI-boom has brought an industry revolution, not just a temporary trend," she added.
Bucking the trend, Toyota Motor gained 0.9% and bank shares rose, with Mizuho Financial Group and Sumitomo Mitsui Financial Group rising more than 0.8% each.
Of more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 58% rose, 39% fell and 2% traded flat.
