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In China, the AI bubble has already burst
The rout has erased $480 billion in market value as investors question whether heavy AI spending can deliver profits.
- China's benchmark CSI 300 index entered bear-market territory on Thursday, October 22, falling 20% from its June peak and marking the longest losing streak since the index's 2005 creation. The sell-off has erased $3.5 trillion in market value.
- Technology and AI-related shares led the rout as intense competition eroded corporate margins and earnings missed forecasts by an average of 9 per cent. Weak domestic demand and a multiyear property sector slump compounded investor pessimism.
- Authorities mobilized the 'national team' of state-backed funds to stabilize markets, lifting the index 1.7% on Friday, though weekly losses still totaled 1.6%. A new 20% tax on offshore trust income accelerated capital flight to American institutions.
- The S&P 500 closed at 2.095 times the Shanghai Composite on October 22, the highest ratio since 1997, signaling global capital's shift toward U.S. equities. This divergence reflects deepening investor skepticism about China's long-term prospects.
- International Monetary Fund Director Krishna Srinivasan said last week that fiscal support is "quite limited in size and scope." Beijing continues incremental stimulus, leaving skeptics questioning whether measures suffice to restore economic confidence without structural reforms.
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Uncertainty in China about when AI investments will translate into company profits is deepening the sell-off in technology stocks. The STAR 50 Index, which tracks the top 50 companies in Shanghai’s technology-heavy STAR Market, has fallen more than 40 percent from its July peak.
·Türkiye
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He is talking about it, since in recent months the companies of the sector have suffered heavy losses on the stock exchange
·Italy
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Chart of the Day: China AI Chip Stocks Slide Despite Surging Earnings
Chart of the Day: China AI Chip Stocks Slide Despite Surging Earnings - Hygon and Cambricon reported robust growth in both revenue and profit even as a broader tech sell-off exposes growing concerns over returns from AI investment
·Beijing, China
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Coverage Details
Total News Sources161
Leaning Left16Leaning Right23Center17Last UpdatedBias Distribution41% Right
Bias Distribution
- 41% of the sources lean Right
41% Right
L 29%
C 30%
R 41%
Factuality
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