China's AI Bubble Has Already Burst

Investors and policymakers are increasingly debating whether the AI bubble is bursting, with major AI stocks like Nvidia, AMD, CoreWeave, and Nebius experiencing sharp declines. In China, however, the bubble has already burst, as evidenced by significant drops in AI-related company shares. Chinese AI firms have seen dramatic losses, with MiniMax down over 84% from its peak and Z.ai falling more than 80% after a failed fundraising attempt. Even major players like Alibaba, Tencent, and Xiaomi have retreated, drawing parallels to China's electric vehicle industry, which saw hundreds of companies collapse amid intense competition. US AI companies face similar risks, with OpenAI raising only $11 billion of a targeted $30 billion and its valuation cut to $1.25 trillion. Neo-clouds like CoreWeave face bond yields above 15%, and Elon Musk has warned that over 200 such companies could collapse due to financing issues.