Chinese wealth funds warn global AI super bubble may burst

Two Chinese wealth funds, Wealspring Asset and Banxia, warned investors in late June 2026 in separate letters that a global AI ‘super bubble’ could be close to collapsing and urged caution on AI-related investments.

Wealspring Asset, which manages more than $1.4 billion, wrote that valuations for AI companies have been driven to unsustainable levels by what it called ‘brainless buying’ and that the ‘collapse point may not be far away.’ The letter noted many Chinese AI firms follow conventional business models, lack durable competitive advantages and require ongoing capital spending to maintain operations.

Banxia, with nearly $300 million under management, raised specific downside risks at large AI players. Its investor communication warned that Anthropic could miss short-term revenue targets, a shortfall the firm warned could prompt a wider market retreat and act as ‘the trigger for the AI bubble to burst.’

Banxia founder Li Bei wrote to investors: ‘If investors want to throw this money into chasing AI – even if you get mad at me for saying this – I’d still strongly advise: please, be very, very cautious.’

Both letters contrasted Chinese AI firms with their U.S. counterparts, arguing many Chinese companies lack long-term moats, face higher funding costs and are more sensitive to capital withdrawal. Wealspring added that without clear business models that generate sustained profits, Chinese AI ventures will need continuous capital injections to grow.

The funds noted sharp increases in valuations across AI and AI-adjacent companies and warned that corrections in expectations or revenue misses at major firms could accelerate capital pullbacks and affect broader technology markets.

Both Wealspring and Banxia recommended limiting exposure to AI equities, monitoring signs that revenue growth or profitability projections are slipping, and reassessing risk allocations rather than chasing recent gains.