The CSI Artificial Intelligence Index dropped sharply by 4.6% on June 26, dragging broader Chinese equity markets down with it. The CSI 300, China’s large-cap benchmark, fell 3%, while the Shanghai Composite lost 2.3%. This correction comes after a historic 120% rally over one year, which had pushed valuations to levels deemed excessive by investors. Concerns center on US export restrictions on semiconductors, high AI infrastructure spending, and the lack of convincing profitability proof points. Hong Kong markets also experienced significant selloffs, particularly in AI and chip-related names.
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