China Shares Fall on AI Circular Financing Fears; Xinyaqiang Silicon Chemistry Down 6%
Chinese shares fell on Tuesday as investor anxiety over artificial intelligence infrastructure financing triggered a broad selloff of technology stocks.The Shanghai Composite Index, the main gauge of Chinese stocks, closed 1.2% lower to 3,823.13. The Shenzhen Component Index dropped 4.5% to 13,509.68.The SSE STAR 50 Index (SSE:000688), the benchmark for the 50 largest science and technology companies on the Shanghai bourse, fell 6.3% at market close.Market anxiety over tech stocks grew over reports that Nvidia is negotiating a $250 billion backstop for OpenAI's Ohio data center project. The proposed guarantee is intended to back the project's lease obligations and construction-related debt, rather than the Nvidia chips installed at the facility, CNBC reported.CNBC's Jim Cramer said when suppliers finance customers' purchases, history shows deals can unravel when cash-strapped buyers can no longer pay, inflicting heavy losses on suppliers and investors alike.In company news, Xinyaqiang Silicon Chemistry (SHA:603155) posted first-half total sales revenue of 305.4 million yuan from 8,059 tons of products sold. Shares of the chemical company were down 6% Tuesday.