China’s mainland stock market has shed about $2.4 trillion in value since May as investors question whether the country’s artificial-intelligence boom can generate sufficient profits. The decline has been concentrated in technology and chip shares, but its scale has weighed on the broader market.
According to Decrypt, the CSI 300, which tracks 300 of China’s largest listed companies, entered a bear market on October 22 after falling at least 20% from its peak. The sharper losses have come in Shanghai’s STAR 50, an index of 50 major technology and semiconductor companies. It has dropped 40% in less than four months, wiping out approximately $480 billion in market value.
AI’s outsized role in the market
Goldman Sachs estimates that AI companies account for 42% of the market value of Chinese shares listed on the mainland and in Hong Kong. They also represent 57% of trading activity. That concentration means weakness in AI-related stocks has had an unusually large effect on overall market performance.
Despite its fall, the STAR 50 is valued at about 100 times earnings. The ratio compares a company’s share price with its current profit and indicates how much investors are paying for each unit of earnings. The index’s valuation has declined from almost 250 times earnings at its peak, but remains well above the Nasdaq 100’s roughly 30 times earnings.
The market’s earlier enthusiasm was reinforced by advances from Chinese AI developers. DeepSeek’s release of a relatively cheap and powerful chatbot in January 2025 helped trigger a sharp reaction in global technology stocks, including a one-day loss of nearly $600 billion in Nvidia’s market value. Moonshot AI’s Kimi K3 caused another sell-off in chip shares in July.
Spending and geopolitical pressure
Investors are now questioning whether AI companies can earn back the money invested in their development. Analysts also point to weak spending by Chinese consumers as a factor weighing on the market.
Beijing has encouraged technology companies to use domestically produced chips. The Financial Times reported that China’s internet regulator told companies including ByteDance and Alibaba to stop buying Nvidia chips in September 2025. Beijing-based AI laboratory Z.ai says it trained its GLM-5.2 model entirely on Huawei chips.
International restrictions have added another challenge. The U.S. Federal Communications Commission banned imports of new foreign-made humanoid robots in July on national-security grounds. Washington is also moving to prohibit Chinese-made optical components from U.S. data centers. Chinese suppliers Zhongji Innolight and Eoptolink have each fallen about 60% from their peaks.
Retail enthusiasm has also cooled. Unitree, a robot maker, attracted orders equivalent to 8,000 times the shares available when it listed in August. Its stock has since lost almost half its value from the launch level, despite a significant recovery this week. Beijing-based fund manager Dong Baozhen described the earlier rally as speculative and said the market was now seeing the bubble burst.
Moneyiar market picture
Moneyiar market data at the stated time shows mixed performance among selected digital assets. Compound was priced at $21.1287447338, down 10.42% over 24 hours but up 0.3% over seven days as of October 25, 2026, at 22:39 +03:30. Loaded Lions was at $0.0011817703, down 2.39% in 24 hours and 3.06% over seven days.
Propy stood at $0.3318772943, gaining 1.7% over 24 hours while falling 3.95% over seven days, based on data recorded at 17:19 +03:30. Ark was priced at $0.1757378999, down 1.77% in 24 hours but up 3.34% over seven days.
