Emerging Asian equities returned to negative territory on Friday, led by South Korea, as higher oil prices rekindled inflation concerns and heavy artificial intelligence (AI) spending by US tech giants unsettled investors.

Sentiment soured after Alphabet and Tesla, the first of the "Magnificent Seven" to report this earnings season, highlighted hefty AI infrastructure spending that raised fresh questions over returns on such outlays.

South Korean shares bore the brunt of the regional sell-off, with the Kospi falling 5.7% by the close after three straight sessions of gains and ending the week 1.9% lower. AI memory maker SK Hynix and rival Samsung Electronics fell 8.3% and 7.4% respectively.

Taiwan stocks lost 2.7% at close, though they were still up 2.3% on the week.

"Concerns over whether hyperscalers can justify massive AI capex are weighing directly on Korea's memory makers and Taiwan's chip supply chain," said Glenn Yin, director of research at ACCM.

"Korea is probably the most exposed because it sits at the intersection of both risks: semiconductors dominate exports while the economy is highly dependent on imported energy."

Crude prices surged above US$100 overnight, reigniting inflation worries across energy-importing emerging Asian economies on Red Sea attacks and disrupted Hormuz traffic.

In Southeast Asia, Philippine stocks slipped as much as 1.5% to their lowest since July 6. The Philippine peso weakened to 61.86 per dollar, headed for its sixth straight week of losses and hovering near a record low of 61.933 against the greenback.

The Philippines' heavy reliance on imported fuel leaves it especially exposed to supply disruptions and price swings during geopolitical crises. At the height of the conflict in March, concerns over fuel supply and prices briefly forced the suspension of electricity trading on the country's Wholesale Electricity Spot Market.

Indonesian stocks dropped as much as 2.4%, marking their sharpest intraday decline since late June, while the rupiah hovered just above the key 18,000-per-dollar level.

In Malaysia, stocks slipped 0.5%, while the ringgit edged lower to 4.091 against the dollar.

Among other regional currencies, the South Korean won firmed to 1,462.2 per dollar and was set for a near 1.3% gain for the week. Meanwhile, Taiwan's dollar slipped to 32.452 against the greenback.

Markets now turn their focus to Singapore's central bank meeting next week, with the Monetary Authority of Singapore expected to keep monetary policy unchanged.