China’s AI selloff meets mixed third-quarter results from Big Tech

Has China’s AI bubble already burst? Shares in China’s biggest AI and chip companies have lost 40% since July, wiping out about USD 480 bn in shareholder value, Reuters reports, calling the crash a bad sign for already shaky global markets as Anthropic readies a blockbuster IPO.

What happened? Prices got too high, traders say, and investors worry that export bans could block Chinese equipment from offshore data centers, further curbing the industry’s growth prospects.

Signs of a bubble in Western markets are less clear even as worries mount about circular finance and the sheer amount of money that AI companies are chasing, including for Anthropic’s IPO and a massive USD 95 bn equity sale program Meta announced this week.

The latest overnight:

• Shares of Alphabet fell after Google’s parent company reported sales and profit figures that fell short of market expectations, even as it more than doubled revenues from its cloud business in 3Q.
• Microsoft’s cloud business is still growing. Revenues from the sale of Azure were up 48% and Microsoft Cloud revenues were up 30%.
• Samsung’s chip unit missed profit estimates, but the company will still be ramping up spending as the AI infrastructure buildout continues.