Chinese artificial intelligence companies, which experienced rapid growth until recently, are now facing a sharp and steady decline in their stock values over the past few months. Market observers view this downturn as a clear sign of deep-seated structural vulnerabilities and speculative overheating.

According to reports, the Shanghai Stock Exchange's STAR50 technology index has plummeted by 40 percent since July 2026, while the capitalization of the companies included in the index has shrunk by a staggering 480 billion dollars. Fund manager Dun Baozhen supposedly stated that the stock market had turned into an unbelievable speculative bubble that is now bursting.

The situation is reportedly exacerbated by data from Goldman Sachs, indicating that AI companies account for 42 percent of total market capitalization and 57 percent of trading turnover for all firms in China. This extreme concentration poses severe risks to the broader financial ecosystem.

The losses have affected virtually all major players in the sector. For instance, shares of robotics maker Unitree—whose private investor demand exceeded supply by 8,000 times during its IPO—have halved in value since trading began in August. Similarly, securities of chipmakers such as CXMT, MetaX Integrated Circuits, and Moore Threads Technology have lost significant portions of their recent gains.

Source: kun.uz