The AI bubble has already burst in China: the technology stock index has fallen by 40 percent

The STAR50 index in China has dropped 40% in less than four months, erasing around $480 billion in market value. This decline complicates capital raising for tech companies and disrupts a two-year stock market rally. Concerns over high stock prices, tax obligations, and potential restrictions on Chinese tech exports have contributed to the sell-off. Investors fear that the U.S. may ban Chinese equipment from data centers. The decline has significantly impacted smaller investors, with companies like Unitree and CXMT seeing their stock values halved. Despite state support, the volatility continues, raising concerns about future tech stock offerings. The current market situation may deter cautious investors, while some analysts see buying opportunities amid the downturn.