China's AI Bubble Bursts

China's artificial intelligence market is undergoing a significant correction. The STAR 50 tech index has plummeted by 40% over four months, wiping out approximately $480 billion in market capitalization. The broad CSI 300 index has also fallen 20% from its June highs.

Major AI sector players face sharp value drops

• AI developers MiniMax and Zhipu have collectively lost around $150 billion in market capitalization compared to peak levels.
• Robot manufacturer Unitree has dropped by 50%, while suppliers of AI infrastructure components have fallen by 60%.

Valuations of overvalued assets have shifted significantly. At the height of the rally, companies in the STAR 50 traded at nearly 250 times annual earnings, whereas they now stand at around 100 times, signaling the deflation of a price bubble.