Stocks on China's mainland have lost about $2.4 trillion in market value since May as investors doubt the country's AI boom will turn a profit. AI companies make up 42% of the market value of Chinese shares, according to Goldman Sachs.
Stocks on China's mainland have lost about $2.4 trillion in market value since May, as investors lose faith that Beijing's AI boom will ever turn a profit. The CSI 300, an index of China's 300 biggest listed companies, entered a bear market on October 22.
AI companies make up 42% of China's market value
AI companies now make up 42% of the market value of Chinese shares listed on the mainland and in Hong Kong, and 57% of trading, according to Goldman Sachs. As a result, when AI stocks fall, the whole market falls with them.
The sharpest damage hit Shanghai's STAR 50, an index of 50 large tech and chip companies. It fell 40% in less than four months, erasing about $480 billion. The index still trades at roughly 100 times earnings, down from nearly 250 at its peak, while the Nasdaq 100 sits around 30.
Analysts point to weak spending and unproven returns
Analysts blame weak spending by Chinese consumers and doubts that AI companies can earn back what they have invested. Robot maker Unitree drew retail orders for 8,000 times the shares on offer when it listed in August, and its stock has since lost almost half its value since launch.
Beijing-based fund manager Dong Baozhen said: "The stock market later evolved into a speculative crazy bull."
US curbs add pressure
The U.S. Federal Communications Commission banned imports of new foreign-made humanoid robots in July on national security grounds. The U.S. is also moving to ban Chinese-made optical parts from data centers, and makers Zhongji Innolight and Eoptolink are down about 60% from their peaks.
Source: Decrypt
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