FinanceReutersIn China, the AI bubble has already burst
China's AI stock bubble has burst, with the sector making up 42% of market value but now crashing hard as valuations collapse and small investors nurse heavy losses.
While global tech stocks teeter, in China they have already crashed as lofty valuations collapse under worries about AI demand and curbs on Chinese exports.
China's AI stocks have crashed after a speculative boom, with the STAR50 index falling sharply from a peak of nearly 250 times earnings to around 100 times.
AI stocks made up 42% of China's total market capitalisation and 57% of turnover, meaning the selloff has hit a huge proportion of investors.
Fund managers say the crash will slow tech company listings and push investors into defensive assets, with some warning the selloff could get worse.
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