China tech stocks are back to March this year, and AI stocks are still almost half their stock index.
some context, first of all, the -40% collapse only brought the STAR50 index back to its March 2026 levels.
and the Chinese stock market is heavily moderated by the government which is very different from the US market. if the stock rallies too quickly, the government generally speaking will try to slow it down. Sometimes through explicit policies 1, sometimes through a kind of "scare tactic" 2. Conversely, when the stock drops too sharply, the government also intervenes to prop it up 3. Honestly I feel more countries should do the same.
The Chinese stock market is also much smaller relative to its GDP (101.5%) compared to the US (227%) 4. All this is to say, if you look at China and think, "huh, their AI bubble burst and they still seem to be fine?", think again. If and when the AI bubble bursts for the US, it's going to be much much worse.
Point 3 is the Buffet Index. In 1929 and 2007 it was at 130%. Guess where that extra 100% comes from. AI companies and AI speculation. We are so fucked.
US markets will halt trading for those same issues.
They really are beating us at everything.
They did beat America in the race towards oppressive authoritarianism, but under Trump, the U.S. has caught up a great deal. So much winning!
Interesting. I think this is the first time I've seen the word "bubble" explicitly acknowledged as a reality and not a question in a headline of a major news outlet.
So I searched for '"bubble" in the past month from Reuters, and found several headlines raising the concern, but none actually using the word "bubble", with the exception of one investors meeting in Singapore.
It seems that editors don't want to scare/anger Western investors with the truth, but the Asia news desk under no such burden.
Its been in the news, The Guardian has been calling it out…its even been called out on foxnews lol. There are others too dating back to beginning of the year too.
AI slowdown calls justified but collapse of bubble may be more immediate threat
AI bubble fears, rising treasury yields put tech stocks to the test
Just going by headline grammar, the first one is a good example: it acknowledges the bubble exist. The second makes it seem like it's just a fear, but not necessarily a reality.
Edit: It's this bubble is really bizarre. I hope all the pundits saying, "Nobody could have predicted" get laughed out of their careers, but I know it will never happen. Accountability is for the poor.
I hope all the pundits saying, “Nobody could have predicted” get laughed out of their careers
Lol, that would be nice, but i doubt it. Its akin to the crypto bubble…some people just get tired of the drum beating and by the time the accountability phase rolls around, theres another crisis happening lol. Never ending doom cycle.
Seems to have more to do with China than AI per-se considering that TSMC, Samsung and SK Hynix are unaffected.
Gotta be number one in everything /s
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