Why China’s Financial Regulator Is Worried About the Global AI Money Rush

Xiao Yuanqi, vice head of China’s National Financial Regulatory Administration, warned on Tuesday in Hong Kong that global capital is flowing into artificial intelligence too quickly and threatening traditional industries and financial stability. Speaking at the Hong Kong Monetary Authority’s Global Financial Leaders’ Summit, he said heavy investment in leading AI firms has driven excessively rapid expansion, raising borrowing costs for other industries and increasing credit risks; he urged policymakers to create frameworks for macroeconomic management and risk prevention. The warning came as AI-heavy stocks declined across Asia. China’s tech-focused STAR 50 index fell nearly 4% on Tuesday to its lowest level since April 2025, while the CSI 300 slipped 0.2%.