In China, the AI bubble has already burst
Summary
China’s AI and semiconductor stocks have slumped sharply, erasing hundreds of billions of dollars in market value as concerns over demand, valuations and export restrictions shake investor confidence. The selloff has halted a two-year rally and renewed fears about the volatility of China’s stock market reform push.
Key Points
- China’s STAR 50 index of AI and semiconductor companies has fallen 40 percent in less than four months, wiping out about $480 billion in market value.
- The slump has stalled Beijing’s efforts to create a more stable “slow bull” market and encourage savers to invest in stocks.
- Retail favorites such as Unitree, CXMT, MetaX Integrated Circuits and Moore Threads Technology have seen steep losses after huge run-ups.
- Investors and analysts blame high valuations, tax concerns and fears of U.S. restrictions on Chinese equipment for data centers.
