China’s AI Bubble Bursts as Markets Lose $480 Billion

China's artificial intelligence bubble has burst, with the STAR50 index of AI and semiconductor leaders losing approximately $480 billion in market value over recent months due to collapsing valuations and concerns about AI demand and export limits. Chinese AI firms differ from Western counterparts by offering open-weight models and charging for processing power, leading to intense price competition that raises doubts about revenue supporting massive investment needs. Analysts cite weak domestic demand and lack of stimulus as factors in the stock decline. The collapse serves as a cautionary tale for global markets, though strict controls on foreign investment into Chinese markets mean the current downturn is unlikely to trigger significant spillovers worldwide.