China, Hong Kong stocks drop as US tech selloff fuels AI bubble fears

Chinese and Hong Kong stocks fell Friday as a Wall Street tech selloff spread across Asia, intensifying fears that the artificial intelligence boom may be losing momentum. Mainland equities recovered some ground on bargain hunting, though the CSI300 Index still declined 1.5% by midday. The Nasdaq recorded its biggest single-day fall since April 2025, wiping trillions off valuations amid worries that a Democratic US midterm victory could tighten AI regulation. Hong Kong's Hang Seng AI Index tumbled 4%, while South Korea's KOSPI plunged over 8% and Japan's Nikkei fell 5%. Chinese AI hardware firms with US exposure suffered steep losses, including Zhongji Innolight slumping 8% and Zhipu plunging 15.4%. Analysts cautioned China cannot stay insulated from the global selloff, though Beijing's market support measures and domestic chipmaker growth prospects offered some buffer.