The AI trade is splitting into two worlds, Goldman Sachs says (www.businessinsider.com)

Goldman Sachs has reported the emergence of two distinct AI ecosystems centered around the US and China, prompting a reevaluation of AI investments. This shift reflects geopolitical tensions and varying growth trajectories, with the bank noting that China is no longer merely a supplier but is developing its own competitive AI landscape, which includes advancements in large language models and AI applications. The analysts emphasized that while China remains behind in semiconductor technology, it is advancing rapidly in other areas of AI, suggesting a narrowing technology gap with the West. This evolving landscape is prompting Goldman to adjust its investment strategy by categorizing Chinese AI stocks into two segments: those linked to Western AI markets and domestic firms benefiting from China’s policies and investments. The performance of these groups highlights their different sensitivities to global trends; for instance, Chinese AI exporters saw significant early gains but have faced volatility, while domestic companies have remained more resilient. Goldman reports that AI-related stocks now comprise a substantial portion of the Chinese market, underscoring the importance of keeping track of these two diverging ecosystems in the future.