Tokyo's Nikkei led the retreat in equities, diving more than three percent, with a stronger yen adding to the downward pressure on exporters.
Global stocks have pushed ever higher this year -- with New York's three main indexes hitting multiple records -- with tech titans such as Alphabet and chip makers such as Nvidia and TSMC boosted by an explosion of interest in all things linked to artificial intelligence.
The rallies have been helped by blockbuster profits and upbeat outlooks, causing investors to pile more cash in owing to a fear of missing out.
However, with valuations pushing to dizzying heights, analysts have been warning about retreat, and Tuesday's earnings from Tesla and Google-parent Alphabet provided a selling opportunity.
Tesla said profits fell 45 percent in the second quarter owing to price cuts and aggressive AI investment and, while Alphabet exceeded forecasts, results from YouTube were less upbeat.
The two firms are part of the "Magnificent Seven" tech kings who have been key to the driving gains in markets this year. Tesla shed 12.3 percent and Alphabet gave up five percent.
All three main indexes on Wall Street tumbled, with the Nasdaq shedding more than three percent and the S&P 500 down more than two percent in its worst day since December 2022.
"Investors are now facing the pressing question: How long will it take for these massive investments by hyperscalers to start delivering over-the-top results?" said analyst Stephen Innes.
"Patience is becoming the new flag-bearer for recent tech stockholders as they wait for these tech bets to pay off," he said in his Dark Side Of The Boom newsletter.
Asia followed suit, with tech firms among the big losers -- Seoul's SK Hynix dived nearly nine percent despite strong earnings, while Samsung lost two percent.
Tokyo-listed Sony was off more than five percent and SoftBank 9.4 percent, and in Hong Kong Tencent gave up three percent with Meituan 5.7 percent lower.
Hong Kong and Shanghai fell despite a surprise cut in a key rate by the Chinese central bank.
Sydney, Seoul, Singapore, Wellington, Mumbai, Bangkok, Manila and Jakarta were also well in the red. Taipei was closed for a second day owing to a typhoon.
London, Paris and Frankfurt were sharply lower in the morning.
The Nikkei in Tokyo tumbled 3.3 percent, with carmaker Nissan shedding seven percent after issuing a profit warning.
Hideyuki Suzuki, senior analyst at SBI Securities, told AFP that "falls in the US tech sector -- especially a plunge in Tesla shares, and disappointing Alphabet earnings -- as well as a stronger yen weighed on the market".
The boom in electric vehicle sales is slowing, and "excessive expectations for AI and other technologies are being corrected", he said.
However, he added that "it's not that economic fundamentals are worsening, so shares may rebound after" Japanese and US central bank meetings.
"The yen is higher on speculation that the Bank of Japan may hike interest rates" at its meeting next week but views are divided, Suzuki said.
The yen extended a rally against the dollar that has been underway in recent weeks, having hit a nearly four-decade low near 162 at the start of this month.
The Japanese unit strengthened to as much as 152.10 per dollar at one point.
"The market is now firmly pricing in a rate cut by the Fed in September," said Moody's Analytics' Stefan Angrick told AFP.
"Inflation and growth in the US have cooled. At the same time, market participants still expect the Bank of Japan to hike rates, if not at the upcoming meeting next week, then in September or October.
"We expect the yen to appreciate as the rate gap between Japan and the US narrows and speculation against the Japanese currency fades."
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: DOWN 3.3 percent at 37,869.51 (close)
Hong Kong - Hang Seng Index: DOWN 1.8 percent at 17,004.97 (close)
Shanghai - Composite: DOWN 0.5 percent at 2,886.74 (close)
London - FTSE 100: DOWN 0.8 percent at 8,092.78
Euro/dollar: UP at $1.0844 from $1.0842 on Wednesday
Pound/dollar: DOWN at $1.2888 from $1.2905
Dollar/yen: DOWN at 152.16 yen from 153.99 yen
Euro/pound: UP at 84.10 pence at 84.08 pence
West Texas Intermediate: DOWN 0.5 percent at $77.22 per barrel
Brent North Sea Crude: DOWN 0.4 percent at $81.36 per barrel
New York - Dow: DOWN 1.3 percent at 39,853.87 (close)
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