Asian stocks struggle on AI spending worries

Asian stocks have slipped and are poised for a second straight weekly drop as investors fret about elevated energy prices, bond market ructions and the huge sums needed to fund AI investment.

Brent crude futures were at $US103.70 per barrel in Asian hours after surging more than four per cent in the previous session on concerns over the war in the Middle East that has fanned inflation worries and led to higher rates across the globe.

President Donald Trump said on Thursday the US will not launch an attack on Iran before November's midterm elections, although traders remained sceptical of any progress being made to end the war.

"The big question for markets is whether Trump sticks to his word if Iranian attacks intensify," said Nick Twidale, chief market strategist at ATFX Global.

"Any indication that the White House is reconsidering military action could see oil prices spike sharply higher, particularly with tanker traffic through the Strait of Hormuz already under significant pressure."

In stocks, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.16 per cent, set for an over one per cent drop for the week.

Markets in South Korea and Taiwan were closed for a holiday while Japan's Nikkei fell more than one per cent during morning trading.

Tech stocks led Wall Street's main indexes lower overnight after a report that OpenAI's annualised revenue was $US20 billion less than the company previously signalled hit sentiment.

"It has been a sea of red across technology, AI infrastructure and semiconductors, with the OpenAI headlines seemingly providing the catalyst for investors to take some exposure off the table," said Chris Weston, head of research at Pepperstone.

"For now, though, the price action suggests investors are becoming more selective about where they want exposure and, importantly, what price they are prepared to pay for future growth," he said in a note.

Investors were also weighing a massive round of fundraising that appears to be on the way, with SpaceX, Broadcom and Oracle all expected to raise billions to buy high-end AI chips.

Australia's Firmus, a data centre operator backed by Nvidia , shelved its $US5 billion initial public offering, citing market volatility and conditions, and said it would opt for a private fundraising round instead.

A toxic mix of higher energy costs, expectations of central bank interest rate hikes and concerns over rising government debts have fuelled a months-long global bond selloff, pushing borrowing costs to multi-decade highs.

"With long-term yields back around multi-decade highs, investors no longer have the luxury of valuing AI growth in a low-cost-of-capital world," said Charu Chanana, chief investment strategist at Saxo.