Shares of Chinese AI start-ups and big tech groups fell further on Friday as investors worried that the scandal at Nvidia would bring tighter US restrictions on chip sales. Jensen Huang, who supported keeping sales open to China, resigned as Nvidia's chief executive on Thursday.
Chinese AI model developers Z.ai and MiniMax sank 10% and 8% in Hong Kong on Friday, extending a sell-off driven by fears of tougher US chip rules. Z.ai has shed about a fifth of its market value in the past two days, while MiniMax has lost 15%.
Alibaba and Tencent lose $75 billion
The sell-off reached big Chinese tech groups that depend on Nvidia chips to train their AI models. This week's rout wiped a combined $75 billion off the market value of Alibaba and Tencent, whose stocks fell 14% and 8% respectively.
Export restrictions already cover the most advanced chips. Even so, many Chinese companies still rely on some Nvidia processors to develop their AI models.
Huang's exit raises policy fears
Huang resigned on Thursday after revelations of extramarital affairs, including with an alleged Chinese spy. He had argued that selling chips to China benefited the US because it would make the country reliant on American technology.
Without Huang at the helm, the US might tighten chip export controls, said Kenny Ng, a strategist at Everbright Securities International, according to the Financial Times. China's foreign ministry on Thursday warned the US against using Huang's relationship with the alleged spy as a pretext for tightening export restrictions on critical technologies.
Some investors are nervous that his downfall, so soon after the US midterm elections, might be the start of an orchestrated campaign against proponents of greater US-China engagement. Song Zhe of BNP Paribas Asset Management said: "People don’t know where this will end."
Chinese chip names gain, optical suppliers slump
Beijing has pushed to develop domestic chipmaking capabilities, and national and local governments have invested heavily in semiconductor companies. Shares of Chinese chip designer Cambricon Technologies have soared more than 20% this week.
Chinese makers of optical equipment needed for data centre chips slumped as well. Zhongji Innolight and Eoptolink both fell more than 8% on Friday.
Source: Financial Times
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