Chinese markets lose trillions as race for AI supremacy with US takes its toll
Summary
Chinese stocks have fallen sharply as investors question whether the country’s AI and robotics companies can earn profits amid weak domestic demand and possible U.S. restrictions. The decline has erased an estimated $2.4 trillion in Chinese market value since May, even as Beijing funds domestic AI development.Key Facts
- The Shanghai STAR 50 Index, which tracks technology and innovation companies, fell 40% since June.
- Other major Chinese stock indexes dropped about 20% over the same period.
- Bloomberg estimated that the sell-off erased $2.4 trillion from Chinese stock markets since May.
- Goldman Sachs estimated that AI stocks make up more than 40% of the market value in China and Hong Kong.
- China launched a state-backed AI investment fund worth 60 billion yuan this month.
- Analysts cited weak consumer demand, lower-than-expected profit margins, rising U.S. interest rates and potential Western restrictions as factors behind the sell-off.
- China’s robotics demand comes mainly from government agencies and research institutions; humanoid robots and robotic dogs remain too expensive or impractical for most home use.
- Shares in Chinese robot-maker Unitree have fallen by half since trading began in August.
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