China's AI Bubble Bursts: $480 Billion Gone in Under Four Months

China’s AI stock rally has reversed, wiping $480 billion off the sector in under four months, according to Reuters. The STAR50 index fell 40%, surrendering two years of gains, robot maker Unitree lost half its value, and the blue-chip CSI300 sits roughly 20% below its June peak.

Investors are selling on stretched valuations and doubts that AI demand will justify them, with possible US export restrictions on Chinese technology adding pressure. Even after the drop, STAR50 trades at about 100 times the earnings of its members, against roughly 30 times for the Nasdaq 100.

China’s AI bubble has already burst

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