On October 20th, which was a Tuesday, the stock of Elice Group, a South Korean AI services firm, took a nosedive, plummeting by 28% on its debut day. At present, the once-fervent market enthusiasm for investing in the AI sector has cooled considerably, leading to the obstruction of listing plans for several companies.

Elice managed to raise KRW 201.1 billion (equivalent to approximately USD 150 million) through its IPO. The company is engaged in providing AI cloud services, as well as AI-powered educational and commercial software. It had plans to allocate a substantial portion of the raised funds towards launching portable modular data centers and establishing the relevant infrastructure.

However, the current economic climate, characterized by high inflation that has driven up borrowing costs, has prompted investors to start questioning whether substantial investments in the AI sector can generate returns in the short term. Kim Hak-joon, an analyst at Kiwoom Securities based in Seoul, highlighted that the market is apprehensive about the possibility of such companies facing difficulties in securing follow-up financing.

As of now, Elice's latest share price is KRW 65,300, significantly lower than its IPO offering price of KRW 90,500. According to regulatory filings, during the IPO period, institutional subscription orders were 388.84 times the number of shares available for subscription, indicating initial high interest that ultimately did not translate into sustained market confidence.