Chinese hedge funds rotate out of Nvidia and US hyperscalers, calling AI a ‘super bubble’

Two of China’s most vocal hedge funds are telling their investors to brace for impact. Wealspring Asset, managing roughly $1.4B, described the current AI trade as a “super bubble” in a recent letter to clients, warning that its collapse could arrive sooner than most expect. Shanghai Banxia Investment Management Center, a smaller fund with approximately $294M under management, reached a similar conclusion through different evidence. The firm pointed to slowing revenue growth at Anthropic as one of several signs that the conditions necessary for the AI bubble to burst have already started forming. The great rotation Both funds have been reducing their exposure to the stocks that defined the AI trade: Nvidia and the US hyperscalers, meaning Microsoft, Amazon, Alphabet, and Meta. The pivot isn’t necessarily out of AI entirely, but rather into the wider ecosystem of data center enablers and supply-chain companies that sit further from the spotlight. AI-focused hedge funds saw their average excess returns decline significantly during the first half of 2026, according to industry data. Wealspring’s founder, Yang Dong, carries a particular credibility on bubble calls. He previously predict...