China's AI Bubble Has Already Burst

Investors and policymakers are increasingly debating whether the AI bubble is bursting, with uncertainty pressuring leading AI stocks from chipmakers like Nvidia and AMD to neoclouds such as CoreWeave and Nebius. In China, the AI bubble has already burst, evidenced by sharp declines in major publicly traded companies. Chinese AI stocks have plummeted dramatically, with MiniMax down over 84% from its peak and Z.ai falling more than 80%. Even major players like Alibaba dropped from $185 to $97, while CXMT, Tencent, Xiaomi, and Lenovo also declined. The pattern mirrors China's electric vehicle industry, where over 600 companies shrank to a struggling few amid price wars. US AI companies face significant headwinds, with OpenAI raising only $11 billion of a planned $30 billion at a reduced valuation. Nvidia fell to $200 from $243, and neoclouds face financing stress with bond yields above 15%. Elon Musk warned over 200 neoclouds could collapse, while the industry grows increasingly competitive.