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AI Balloon in China Deflates by Half a Trillion Dollars

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AI Balloon in China Deflates by Half a Trillion Dollars

There’s been a lot of talk this year about a humongous AI bubble. We’ve written about that many times here on CleanTechnica, but focused on the US market. AI software companies have massive valuations/market caps based on hype and growth in AI use but without demonstrating anything close to profitability or a clear plan for profitability. AI hardware company growth is dependent on continued software growth, of course. Well, if it’s a bubble or a balloon, it’s still fully blown up in the US, but there’s reporting now that the AI balloon has been deflating (a lot) in China.

“A report from Reuters suggests that the AI bubble in China ‘has already burst.’ Or it might be more apt to say that it shriveled like a rapidly deflating balloon,” Futurism writes. “Over the past four months, Reuters notes, the country’s STAR50 index of AI and semiconductor companies collapsed by 40 percent, wiping out $480 billion in market value. That is not a typo.”

It seems the same thing has been happening in China with AI hype as we’ve seen in the US, and there have thus also been people over there warning of it being a big bubble. “The stock market later evolved into a speculative crazy bull,” Dong Baozhen, a fund manager in Beijing, told Reuters. “And now we see the bubble bursting.”

Of course, the robotics craze and the AI craze have been going hand in hand for the past year or two. This reporting seems to link the two.


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