Lack of profits and the threat posed by western countries are raising concern about the sustainability of Beijing’s AI boom
Trillions of dollars have been wiped from China’s stock markets in recent months amid increasing anxiety about the future of artificial intelligence, as Beijing races against the United States for dominance in the sector.
The STAR 50 Index, which tracks technology and innovation companies on the Shanghai stock exchange, has plunged 40% since June. Other indexes of major companies dropped by about 20% over the same time period.
The precipitous drop has wiped out $2.4tn from the Chinese stock market since May, according to Bloomberg.
AI stocks account for over 40% of the stock market value in China and Hong Kong, according to Goldman Sachs, meaning that any dent in value will send shockwaves across the whole domestic market.
So are the stock market claims false?
I’m sure they’re accurate, they’re just not important. AI isn’t seen as an investment vehicle in China.
This doesn’t make any sense if they have a stock market with AI stocks, these stocks have a value assigned to them, and that value makes up 40% of the value of the entire stock market. If these weren’t important and aren’t investment vehicles then why does any of the above exist? You’re telling us that $2.4T evaporating into thin air is meaningless to China?
I’d be willing to bet money that if this article were saying the exact opposite thing, the comments here would be all about how “China is doing capitalism better than the capitalists.” I have zero love for our capitalists here and our absurd AI market, but this disingenuous tribalism is quite ridiculous.
It’s important to understand that capitalists do not run China. The CPC dictates how AI is treated. Chinese capitalists may have tried to make money off of AI like their western counterparts, but this is biting them hard when the CPC clearly demands that AI be developed in an alternative direction. The capitalist class may be trying to use AI as an investment vehicle, but they do not have a say in whether or not that actually comes to pass in a practical manner.
A good analogy is the housing industry. Real estate was made an investment vehicle by the capitalist class, only for the CPC to intentionally deflate the housing market. Housing prices fell, which cost lots of Chinese capitalists lots of money, but they had no say in the matter. The CPC dictated that houses were for living, not speculation, and then capitalists were forced to deal with the reality set without their consent.