Chinese tech shares fall 40% since June as AI rally falters

The STAR 50 Index, which tracks technology and innovation companies listed on the Shanghai stock exchange, has fallen 40% since June 2026, according to The Guardian. Other indexes covering major Chinese companies have dropped by about 20% over the same period.

Bloomberg has estimated that about $2.4 trillion has been wiped from the Chinese stock market since May 2026. The losses have been concentrated in artificial intelligence (AI) companies. Goldman Sachs estimates that AI stocks make up more than 40% of stock market value in China and Hong Kong.

Bloomberg reported in mid-October that Chinese stocks had posted a record weekly losing run around October 19, even as China's state-linked funds were active in the market. The STAR 50 became the world's worst-performing major technology gauge in the half year to October 2026, Bloomberg said. The CSI 300, an index of large Chinese companies, closed 1.8% lower on October 22, and was down 11% for 2026 as of October, according to Asia Times.

The pattern has not been one-way. Around October 23, Chinese stocks swung into gains as trading picked up in a basket of exchange-traded funds (ETFs, which are bundles of shares that trade like a single stock) favoured by China's "national team", a term used for state-backed buyers, Bloomberg reported.

Government action has included a 60 billion yuan state-backed AI investment fund, which began putting money into domestic AI developers in October 2026. The Guardian also reports that China has restricted overseas investment, with further regulations taking effect on 1 December 2026.

Outside China, the United States has banned humanoid robots from China, citing national security risks. The US is also thought to be considering a ban on Chinese components in data centres, the large computing facilities that run AI systems.

Shares in Unitree, described as China's leading robot-maker, have halved since the company began trading in August 2026, according to the Guardian.