HMM: It Appears That the AI Bubble Has Just Burst in China.

A report from Reuters suggests that the AI bubble in China “has already burst.” Or it might be more apt to say that it shriveled like a rapidly deflating balloon: over the past four months, Reuters notes, the country’s STAR50 index of AI and semiconductor companies collapsed by 40 percent, wiping out $480 billion in market value. That is not a typo.

“The stock market later evolved into a speculative crazy bull,” Beijing-based fund manager Dong Baozhen told Reuters. “And now we see the bubble bursting.”

Shares of Unitree, China’s buzzy robotics company, have halved since the company went public in a much-hyped IPO in August, the reporting noted. The chipmaker CXMT, meanwhile, has lost more than a quarter of its value over the past month.

The vicissitudes of the stock market haven’t completely dampened AI investors’ spirits, though. DeepSeek, one of China’s top AI companies, recently raised $15 billion in one of the largest funding rounds in the country’s history, Bloomberg reported. The outlet also noted that Huawei clinched a $2.3 billion loan from Chinese banks to spend on more AI chips.

Maybe less of a popped bubble and more of the inevitable shakeout finally taking place.