China's AI Stock Bubble Bursts, STAR50 Index Plunges 40%

China's AI stock bubble has burst, with the STAR50 index plunging 40% in under four months, erasing roughly $480 billion in market value amid AI demand concerns and export restrictions. The crash follows a two-year surge driven by economic stimulus promises, ending Beijing's attempt to break the boom-bust cycle. AI stocks now represent 42% of China's market capitalization, leaving few investors unscathed. Individual stocks like robot maker Unitree have halved in value since August, while chipmakers MetaX and Moore Threads also lost half their value. The STAR50 still trades at a P/E ratio near 100, raising fears of further declines.