In China, the AI Bubble Has Already Burst

An anonymous reader quotes a report from Reuters: While global tech stocks teeter, in China they have already crashed as lofty valuations collapse under worries about AI demand and curbs on Chinese exports. The meltdown, tanking the mainland STAR50 index of AI and semiconductor leaders by 40% in less than four months and vaporizing some $480 billion in market value, is an ill omen for wobbly world markets and a dampener on China's efforts at encouraging its savers into stocks to fund the AI boom. It has also slammed the brakes on a rally running two years, since economic stimulus promises sent shares soaring, and has stalled Beijing's push to break with a long boom-bust pattern and drive a "slow bull" market that delivers reliable performance. China's broad blue-chip index has dropped about 20% from highs made in June. "The stock market later evolved into a speculative crazy bull," said Beijing-based fund manager Dong Baozhen. "And now we see the bubble bursting." There was no clear trigger for the selloff in China, though traders pointed to high valuations, tax bills, and the threat of foreign bans on Chinese data center equipment. According to Goldman Sachs, AI stocks account…