Signs of an ‘AI Apocalypse’ Emerge in China as the Bubble Bursts
Jakarta, CNBC Indonesia –A sign that many have feared is now beginning to emerge. In China, the artificial intelligence (AI) industry bubble has burst. Over the past four months, the stock indices of major technology companies have plummeted, wiping hundreds of billions of US dollars—equivalent to tens of thousands of trillion rupiah—off the stock market.
Reuters reports that the STAR50 index—comprising numerous AI and chip companies that were once a source of pride and the focus of global attention—has seen its value plummet by 40 percent. The market has shed US$480 billion (approximately IDR 8,400 trillion) in value.
“The stock market turned into a speculative frenzy. And now, we are seeing that bubble burst,” said Dong Baozhen, an investment fund manager based in Beijing.
Many companies that were once highly acclaimed have now faltered. Shares in robotics firm Unitree have lost half their value since the company went public last August. Chip manufacturer CXMT has also seen its value drop by more than a quarter over the past month.
However, not everyone has lost hope. Leading AI company DeepSeek has just successfully raised US$ 15 billion (approximately IDR 262.5 trillion)—one of the largest funding rounds in Chinese history. Meanwhile, Huawei has secured US$ 2.3 billion (around IDR 40.2 trillion) in loans from domestic banks to purchase artificial intelligence chips.
Some argue that this downturn is not solely due to a saturated market. China continues to face external hurdles, including export restrictions and potential bans on data center equipment. Nevertheless, the trend emerging in China mirrors developments seen elsewhere: the capital poured into this industry is staggering, yet the anticipated profits have yet to materialize.
A similar trend is beginning to emerge in the United States. The company Anthropic has recorded losses of US$80 billion (approximately IDR 1,400 trillion) and plans to spend US$1 trillion (around IDR 17,500 trillion) on building data centers over the next 10 years. These figures have led many investors to start asking: when will the profits arrive?.
SOURCE : CNBC INDONESIA
