Chinese hedge funds warn AI ‘super bubble’ is nearing collapse

Two of China's most prominent hedge fund managers issued stark warnings this week that the global artificial intelligence stock boom has entered dangerous territory, adding to a chorus of bearish voices as technology shares stumbled through a volatile week of trading.

Bubble Warnings From Beijing and Shanghai

Yang Dong, founder of Wealspring Asset Management, declared that AI stocks have formed a "super bubble," warning that hot AI-related shares could plunge 80 to 90 percent and that "the collapse point may not be far away." Yang pointed specifically to China's A-share AI computing infrastructure sector as an epicenter of excess, invoking Warren Buffett's valuation framework to argue that prices have detached from fundamentals.finance.biggo

Separately, Li Bei of Shanghai Banxia Investment Management explicitly flagged risks in the AI sector, stating that "the trigger for the AI bubble to burst has already appeared" and that conditions for a collapse are already in place. Banxia cited pressure on revenue growth at Anthropic, the maker of the Claude AI assistant, as evidence that the commercial foundations underpinning sky-high valuations are shakier than investors believe.x+1

Markets Rattle Heading Into the Weekend

The warnings landed during a punishing week for technology stocks. On Friday, futures tied to the Nasdaq 100 fell 1.16 percent in premarket trading as chip stocks resumed their slide after a brief Micron ↘ 5.49%-led rally the prior session. Intel ↘ 5.25% and Advanced Micro Devices ↘ 4.26% dropped more than 3 percent each in premarket activity, while Nvidia ↘ 1.39% slid 1.4 percent, according to Reuters.money.usnews

The S&P 500 and Nasdaq were on pace for steep weekly losses, with the SMH chip ETF VanEck Semiconductor ETF ↘ 4.54% having plunged 7 percent in a single session earlier in the week. South Korea's Kospi sank as much as 8 percent on Wednesday before partially recovering, underscoring how the tech selloff reverberated across Asia.cnbc+1

A Growing Chorus of Skeptics

The Chinese fund managers join a lengthening list of prominent investors questioning AI valuations. Michael Burry warned in May that AI market conditions resembled the final months of the dot-com bubble, while Ray Dalio said in early June that the AI boom is showing "classic bubble behavior." The debate intensifies as Anthropic and OpenAI prepare for fall IPOs at combined valuations approaching $2 trillion.tradingkey+2