Business · Markets · 1 hr ago
Chinese tech shares slide as investors question the AI boom
Chinese technology shares have fallen sharply as investors question whether the country’s AI boom can deliver profits.
The Shanghai-listed STAR 50 index, which tracks technology and innovation companies, has dropped 40% since June, while other major Chinese indexes have fallen about 20%.
The sell-off follows a rapid rise in AI stocks, which make up a large share of the value of Chinese and Hong Kong markets.
Companies face weak demand from Chinese consumers, and many AI products are still too costly or impractical for everyday use.
Possible US restrictions on Chinese technology add to investor concerns, particularly for companies that depend on exports or supply data centres.
The losses are making investors more cautious and could make it harder for technology firms to raise money by listing shares.
China’s technology shares have fallen sharply as investors question demand for artificial intelligence and worry about restrictions on Chinese exports.
The STAR 50 Index, which tracks technology and innovation companies, has dropped about 40% since June.
China’s broad blue-chip index has fallen about 20% from its June highs.
The sell-off has hit companies including robot-maker Unitree and several chipmakers.
Weak domestic demand, limited company profits and possible US restrictions are among the concerns cited by analysts and traders.
- Who
- Chinese technology companies and investors, including retail investors, are affected.
- What
- Chinese technology shares have plunged as investors reassess AI-related valuations and demand.
- When
- The decline has taken place in recent months, with the STAR 50 falling about 40% since June.
- Where
- China’s mainland stock markets and Hong Kong.
- Why
- Investors are concerned about high valuations, weak domestic demand and possible restrictions on Chinese technology exports.
This story does not have two clearly opposing sides.
China’s STAR 50 Index began a fall that reached about 40% by the time of the reports.
Shares in robot-maker Unitree began trading.
The Globe and Mail published a report on the Chinese AI share sell-off.
The Guardian published a report on losses in Chinese markets amid anxiety over AI.
- STAR 50 Index
- Down about 40% since June
- China’s broad blue-chip index
- Down about 20% from June highs
- Unitree shares
- Halved since trading began in August
- AI stocks
- About 42% of China’s market capitalization, according to Goldman Sachs
- Chinese stock market losses
- $2.4 trillion wiped out since May, according to Bloomberg and the Guardian
3 sources
What people are saying
The stock market later evolved into a speculative crazy bull.
And now we see the bubble bursting.
This year, the profit margin is not as good as expected. And the US is raising rates. And China’s domestic demand is so weak.
What’s happening is now going to put a stop for many of the companies trying to get themselves listed.