Decline and bubble debates in China's artificial intelligence sector
While AI stocks in China fall, Bain & Co warns of an annual $6 trillion revenue. Investor interest continues amid ongoing debates over a bubble in the sector.
According to Reuters, while stocks in China's AI sector have declined, Bain & Co warned that data centers could reach $6 trillion in annual revenue by 2031, with experts stating that the bubble has burst.
While shares of a China-based robotics company have dropped by half since their August IPO, chip designer CXMT has lost 25 percent of its value in the past month. Bain & Co, one of the world's largest management consulting firms, stated that the only way to justify the capital flowing into data centers is for the global AI sector to reach $6 trillion in annual revenue by 2031. Beijing-based fund manager Dong Baozhen stated that the stock market had entered a speculative frenzy and it is now visible that the bubble has burst.
Despite the volatility in the stock market, it is noted that AI investors' enthusiasm has not been completely broken. Chinese AI company DeepSeek raised $15 billion in funds, while Huawei also secured a $2.3 billion loan from Chinese banks. In global markets, news that Nvidia would invest $3 billion in Meta supported demand for tech stocks, and the New York Stock Exchange closed higher on October 27.
Sources
- 10haber.net · Link