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Posted on 10/26/2026 7:44:24 PM PDT by yesthatjallen
China's AI stock rally has collapsed, wiping out about $480 billion as the STAR50 index of AI and chip companies fell 40% from its July high.
US AI stocks have taken a far smaller hit so far. The Nasdaq is about 6% below the record it set three weeks ago. This week's Big Tech earnings will test whether that gap holds.
How China's AI Bubble Burst
Analysts have pointed to stretched prices, tax bills, and the risk of US bans on Chinese data-center equipment.
The damage is wide. AI stocks account for 42% of China's market value and 57% of its trading, according to Goldman Sachs.
The broader CSI 300 index of China's biggest companies entered a bear market last week, as BeInCrypto reported.
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(Excerpt) Read more at finance.yahoo.com ...
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Babel II
Black Rock Nevada Burning Man
China is in a lot of trouble. I think they are past the point of salvation. The best they can do is manage their decline until their economy matches their fundamentals.
I’m guessing our AI is somewhat less fake than China’s. Could be wrong.
AI is still in the INFANTILE stage isn’t it? You tell me. There is something to be said about being cautious but then there’s something to be said for being pedal to the metal. I say let the chips fall where they may. The big investors may be totally uncautious so let them take those chances that communism will never allow. I tell you...
It’s gonna be awesome!
Interesting choice of words. The AI industry has vacuumed up the GPU, CPU, RAM and storage chips to build out their vision. Much of that inventory may be bordering on obsolete by the time the physical data centers, servers and networks that will use the chips reach a point of providing revenue generating service. Corporate America replaces servers and end user devices about every 3 years as operating systems evolve and need better hardware. Recall the obsolescence of hardware that could no longer run Windows 11. I suspect AI is going to run into the very same programmed obsolescence.
When President Trump, someone I support fully, said we have to keep fighting to get the most and best AI to get ahead of China in the race, I thought: What happens if AI causes a crisis in China, tries to take over, shuts down their internet and water and electricity and threatens the Chinese?
We’ll watch from afar and be glad we weren’t number one.
Full disclosure: I already hate computers, smart phones and the tech takeover.
I tried using AI for 3 problems I was facing. All 3 AI solutions proposed by AI did not work.
I predicted months ago AI is hype similar to interne, biotech meds, color TV and so on. AI stocks are way overvalued sane as during the internet bubble 15 years ago and real-estate bubble before that. Until real earnings show up it is by definition a bubble.
Eventually, it’ll surpass human brainpower, at least in many ways. The only question is what’s “eventually.” Could be in 50 years. Could be in 5 years. No one knows. A lot of people are guessing, but no one can say who’s right.
Why do you say that?
I’ve been reading about the coming decline of China for decades and stopped paying attention about 5 years ago post covid.
Why do you think now is past the point of salvation? The demographics? Or something else?
The next step in the internet and AI will be electro-optical circuitry. U.S. Developed polymers will start to be used and result in less heating, faster speed, lower cost, no need to use copper cables, can use fiber optic.
Demographics is most of it. You need a certain level of productivity to have a certain level of lifestyle. Old people, even if they can be kept busy, will not have the level of productivity as a young person. China is running out of young people, thanks to its a child policies.
There comes a point where your ability to support the welfare state stops, because you stopped having children.
Clif High offered up a prospect that we will get to biological compute engines that have more capability with much lower need for power and cooling. The concern about power, water and heat would go away.
China has a a generation of American educated engineers and scientists. I was researching some engineering formulae and I ended up on MIT’s website. Every discovery and research team was mostly Chinese.
But wouldn’t productivity increases due to roboticization, automation and AI take care of that problem?
China has been automating its economy, for that reason.
IMHO, the biggest issue with China’s tech sector is the government hand in absolutely everything - so anything that gets sold overseas has the (certain) possibility of being security-compromised; now that fact is running straight into reality.
You have to remember that in ccp mainland china, it’s all about the graft. Lying and theft, add in payola and bribery....
They will screw over their own and will do worse to everyone else.
this is the reason the AI companies like Anthropic and OpenAI and Google and Gemini will implode.
More companies have been turning to open-source models from US and Chinese AI developers, which are less expensive and can be run locally or on private clouds.
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