China’s AI-Linked Market Takes a $2.4 Trillion Depeg as Investors Reprice the Boom

China’s mainland stock market has shed about $2.4 trillion in market value since May, more than South Korea’s entire economy produces in a year, as investors question whether Beijing’s AI boom can turn a profit. AI companies account for 42% of the market value of Chinese shares listed on the mainland and in Hong Kong and 57% of trading, according to Goldman Sachs. The CSI 300, an index of China’s 300 biggest listed companies, entered a bear market on October 22 after falling at least 20% from its peak.

The sharpest damage hit Shanghai’s STAR 50, an index of 50 large tech and chip companies. It fell 40% in less than four months, erasing about $480 billion, and still trades at roughly 100 times earnings, down from nearly 250 at its peak. The Nasdaq 100, the U.S. tech benchmark, sits around 30. DeepSeek, a Chinese startup, released a cheap and powerful chatbot in January 2025; Nvidia, the U