China Defies Global ‘AI Scare Trade’ as Investors Chase Winners

Global investors are dumping US software and wealth management stocks amid fears AI advancements will disrupt traditional business models, triggering a market selloff dubbed the "AI scare trade." China’s tech sector remains resilient, defying the trend as domestic investors double down on AI-driven firms, betting on long-term growth despite Western caution. The divergence highlights contrasting market psychologies: US investors prioritize risk aversion, while Chinese backers aggressively chase AI leaders, viewing disruption as opportunity rather than threat. Analysts note China’s state-backed funding and regulatory support for AI startups shield them from volatility, contrasting with US firms facing shareholder pressure over AI-driven obsolescence. The shift underscores a broader geopolitical tech race, with China positioning itself as a haven for AI investment amid global uncertainty over the sector’s economic fallout.