AI Investment Bubble in China Faces Risk of Bursting
China's STAR50 index, which tracks artificial intelligence and semiconductor companies, has lost 40 percent of its value over the past four months, wiping out $480 billion in market capitalization.
A severe decline is occurring in the valuations of AI-focused companies within China's tech market. The STAR50 index, which covers firms in the artificial intelligence and semiconductor sectors, dropped by 40 percent over the past four months, resulting in a total market loss of $480 billion.
Market analysts and fund managers describe the current situation as the bursting of a speculative bubble. Beijing-based fund manager Dong Baozhen notes that the market has been overvalued and has entered a correction phase. Among the companies affected by the downturn are robotics firm Unitree, which has lost half its value since its August IPO, and chipmaker CXMT, which has shed more than a quarter of its value in the past month.
Despite the downward trend, large-scale funding activities continue, such as DeepSeek securing $15 billion in investment and Huawei obtaining a $2.3 billion loan for its AI chips. According to Goldman Sachs data, AI stocks account for approximately 42 percent of China's market capitalization. Experts assess that US restrictions on technology exports, alongside market speculation, have also contributed to this decline.
Sources
- futurism.com · Link