Chinese AI stocks shed $340bn as bubble deflates

The bubble in Chinese AI equities is bursting, with clear evidence from the numbers. The Star 50 AI stock index has fallen 42% from its late June peak.

China's broader tech sector, as measured by the CSI 300 index, has dropped 18%.

Both benchmarks have fared far worse than the Nasdaq 100, which only fell 1.5% over the same timeframe.

The steepest drops are coming from publicly traded Chinese AI companies with mainland operations, which are large components of those indices.

AI model firm MiniMax stands out as a severe case. Its Hong Kong-listed shares ended Thursday's session 87% beneath their earlier-year peak of HK$1,330.

Unisound, which develops AI speech and language software, has also seen a comparable decline from its 2026 high.

The total market value lost across 14 Chinese AI stocks amounts to $340 billion from their 2026 peaks.

The sell-off has been so severe that only three of the 14 companies had losses under 50%.

Protos focused its selection on publicly traded firms with significant mainland China operations that generate most of their revenue from AI models, AI software, or AI chips, to keep the data relevant.

A partner at Shanghai Zhuozhu Investment Management acknowledged the severity of the downturn in Chinese AI stocks. “All bubbles inevitably burst,” they said. Hong Hao of Lotus Asset Management cautioned that many mainland AI stock offerings are being suspended.

AI stocks still make up about 40% of China's equity market. Bank of America's Alex Liu commented to Bloomberg, “Right now it’s actually hard to say who’s going to survive.”

AI leads ‘longest losing streak’ for Chinese stocks

Read more: Bank stocks crashed by $22 billion after AI access scare