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China's AI Stock Selloff Shows No Signs of Easing as Competition Intensifies

October 22, 2026 at 22:40 EDT

Foundation Models
Funding & M&A
Security

Chinese artificial intelligence model developers MiniMax Group and Z.AI have lost a combined $150 billion in market value since their January debuts, with the selloff accelerating as fierce competition and unforeseen threats reshape the sector's outlook. The brutal reversal marks a dramatic reversal of fortune for two of China's most closely watched AI companies, which saw their stock prices soar at IPO but have since declined by more than 80% from their highs.

October 2026 · Market Downturn

China's AI Model Developers Face Historic Selloff

MiniMax and Z.AI have shed $150 billion in market value since January debuts as competition intensifies and rival listings threaten investor confidence.

$150B

Value lost since Jan 2026

80%+

Decline from highs

190M

Distillation queries detected

Rival IPOs pending 2027

Stock Performance: MiniMax vs. Z.AI

MiniMax

~30% drop Sept

Z.AI (Zhipu)

~30% drop Sept

Competitive Threat

Moonshot AI ($3B IPO target), DeepSeek ($74B valuation), and GigaAI are preparing listings that threaten investor capital reallocation.

Profitability Gap

Analysts project neither firm will achieve sustained profitability until 2028, despite large global user bases.

The Distillation Factor

Anthropic disrupted 7 Chinese labs conducting systematic extraction of Claude model outputs across 190 million queries (May–July 2026). The incident exposed how competitors are attempting to reverse-engineer Western AI capabilities, intensifying regulatory and market concerns.

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