🚨 CHINA'S AI BUBBLE IS BURSTING Almost ¥23.5 TRILLION has been wiped out from the Chinese stock market from its 2026 peak, as it has entered bear market territory. And AI is taking the biggest hit. China's STAR50 index has crashed 40% in less than four months, wiping out ¥3.2 Trillion. Some of the biggest AI stocks have suffered even worse losses: • Unitree: Down nearly 50%. • CXMT: Down over 25% in a month. • Zhongji Innolight and Eoptolink: Down around 60%. But why is China's AI market collapsing? 1. Extreme valuations: AI stocks have become so expensive that even strong future growth can't justify their prices. 2. Weakening confidence in AI demand: Investors are questioning whether companies can generate enough profits from the massive spending on AI. 3. US restrictions: Fears of new restrictions on Chinese technology entering American data centers are hurting chipmakers and suppliers. 4. Speculative buying: According to Goldman Sachs, AI stocks accounted for 57% of trading activity across the Chinese markets it examined, leaving investors heavily exposed when selling began. And here's what's really shocking. Even after the crash, China's STAR50 trades at roughly 100 times earnings, compared with around 30 times for the Nasdaq 100. This means that the Chinese stock market crash may not be over yet, and there's still more pain ahead.