Wall Street and Chinese Funds Back Both Sides of AI Race
U.S. banks are helping Chinese tech firms raise billions as Chinese investors increase exposure to American AI and chip companies.
Investors are funding companies on both sides of the U.S.-China AI race, even as Washington and Beijing build separate technology supply chains. Wall Street banks have helped arrange 19 Chinese high-tech share deals worth $17.2 billion so far this year, LSEG data show.
Those deals account for nearly 30% of Chinese high-tech equity issuance, according to the data. Goldman Sachs, Morgan Stanley and Citigroup coordinated a $6.8 billion Hong Kong listing by optical-parts maker Zhongji Innolight.
Chinese investors are also buying U.S. technology shares. The value of U.S. stocks held by mainland Chinese and Hong Kong residents rose 23% over the past year, topping $750 billion, U.S. data show.
Chinese-owned funds have increased holdings in chipmakers including Nvidia, AMD, Micron, Lam Research and Applied Materials. Separately, U.S. AI funding rounds involving investors based in China or Hong Kong reached about $8.9 billion through mid-September, up from roughly $436 million in 2023, S&P Global Market Intelligence data show.
The cross-border flows persist despite U.S. curbs on advanced chip exports and limits on some American investment in China’s sensitive technology sectors. Publicly traded securities are exempt from those investment restrictions, leaving banks room to underwrite Chinese listings while investors take stakes across the divide.
China’s push to develop domestic alternatives is adding to the stakes. Alibaba said this week its new Zhenwu V900 chip delivers three times the performance of its predecessor, as the company prepares larger AI models. U.S. export controls have limited China’s access to some advanced chips and chipmaking tools.
Ahead of the Trump-Xi meeting in Washington, Treasury Secretary Scott Bessent said U.S. and Chinese officials had discussed an AI dialogue and a system for flagging shared goals and risks. Investors still face the possibility that worsening relations could disrupt financing links and split the industry further.
For now, the bets reflect a view that neither country is certain to dominate AI. A sharper policy break could turn today’s cross-border exposure into a source of losses instead of diversification.
This article was produced with the help of AI technology.
Source: Yahoo Finance
