In China, the AI bubble has already burst
The selloff hit retail favorites and chip suppliers as investors questioned valuations, future AI demand and export curbs, analysts said.
- China's STAR50 index of AI and semiconductor leaders has plunged roughly 40% from its July peak, erasing $480 billion in market value as the technology-driven rally reversed sharply.
- Valuations skyrocketed to nearly 250 times trailing earnings before the correction, while traders cite high prices, tax bills, and potential U.S. bans on Chinese equipment in data centers as key drivers of the selloff.
- Shares in robot-maker Unitree have halved since its August debut, while chipmakers MetaX Integrated Circuits and Moore Threads Technology have also halved in value since July after surging 700% and 400% respectively at their market debuts.
- The market rout has pushed investors toward defensive assets, with Lotus Asset Management's Hong Hao warning the correction will "put a stop for many of the companies trying to get themselves listed." Equity fundraising by tech firms is likely to slow.
- China Securities Regulatory Commission Chairman Wu Qing met with market participants earlier this month to discuss oversight, while Beijing-based fund manager Dong Baozhen noted the market "evolved into a speculative crazy bull" before the inevitable collapse.
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WHILE INVESTORS around the world watch with trepidation the hundreds of billions of dollars pouring into artificial intelligence, exactly what everyone fears has happened in China.
(Seoul = Yonhap News) Reporter Kwon Sook-hee = As AI-related stocks recently plummeted in the Chinese stock market, the Chinese government's ambitious "AI rise" is being put to the test.
The excessively high valuations of AI stocks in China are receding under the weight of concerns about artificial intelligence demand and restrictions on Chinese exports. The post China's AI "bubble" has already burst appeared first on in.gr.
The enthusiasm for artificial intelligence seems to be turning into panic in China's financial markets. The actions of companies considered until recently the stars of the AI revolution have collapsed, and investors have wiped out nearly $480 billion of the sector's value in just a few months. Analysts warn that the decline could continue, despite Beijing's promises to support the technology industry.
The AI bubble in China appears to have burst with the fall of the STAR50 index and the declines of several companies
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