Two of China’s best-known hedge funds are calling the AI boom an unsustainable “super bubble.” Wealspring Asset says the “collapse point may not be far away.” Shanghai Banxia says “the trigger to burst has already appeared.” Four more Chinese funds agree. The skeptics have arrived β from the country building its own AI stack.
Wealspring Asset said global AI stocks have become a “super bubble” and that the “collapse point may not be far away.” Shanghai Banxia Investment Management Center said “the trigger for the AI bubble to burst has already appeared.”
At least four other Chinese hedge funds expressed reluctance around AI, with both Wealspring and Banxia advising investors to be cautious due to concerns over valuations and the lack of a long-term moat for some AI infrastructure companies.
The hedge funds aren’t saying AI doesn’t work. They’re saying AI infrastructure companies lack durable competitive advantage. This week’s data supports it: Big 3 token share collapsed 72% β 33% in one year. Open-source is commoditizing the model layer. If models are commodities, the companies selling them at premium prices are overvalued.
This Bloomberg piece arrived the same day as the $270B AI routstory. Chinese hedge funds calling bubble + US leveraged ETFs unwinding + SpaceX down 30% + OpenAI delaying IPO. Four independent signals all pointing the same direction: the market is repricing AI from hype to fundamentals.
Six Chinese hedge funds are calling AI a super bubble. The same week the $270B rout hit AI chip stocks, OpenAI delayed its IPO, and Tim Cook called memory costs “unlike anything in 40 years.” The consensus is fracturing. But the “no moat” concern is the sharpest critique β because the token share data (72% β 33%) confirms that the model layer IS commoditizing. The question isn’t whether AI is real. It’s whether the companies at the top of the stack can defend their margins when open-source alternatives cost 1/6th as much.
Business Engineer
The AI Supercycle β Which Layers Survive the Correction
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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