China's AI bubble begins to burst: Asian Tech Roundup

Plus: Was Jensen Huang honeytrapped?

Welcome to Computing's weekly roundup of tech news in Asia. This time we look at China's AI decline, Nvidia spying accusations, and South Korea's data breaches.

China’s AI stock rally has reversed, amid concerns about demand and restrictions on Chinese technology exports. The mainland STAR50 index of AI and semiconductor companies had fallen 40% in under four months, wiping out about $480 billion in market value. The broader blue-chip index was down about 20% from its June highs.

Weak domestic demand and disappointing profits are adding to the pressure. Demand for humanoid robots remains concentrated among government agencies and research institutions, with the machines still too expensive and impractical for many households. Shares in robot-maker Unitree have halved since trading began in August.

The sell-off has also hit suppliers of AI infrastructure. The value of shares in optical component makers Zhongji Innolight and Eoptolink Technology were down roughly 60% from their June and July peaks, partly due to US moves towards barring them from supplying American datacentres.

Australia

• Australia’s cyber agency accessed an Amadey malware backend and disconnected its controller from 180,000 infected computers worldwide. Source

China

• State funds injected billions of dollars into Chinese stocks as markets entered bear territory following a sharp sell-off in AI and technology shares. Source
• China’s AI investment boom is facing a sharp market correction, challenging valuations and expectations surrounding the country’s race to build competitive artificial intelligence. Source
• The Chinese government has said accusations of a Chinese spy snaring Nvidia CEO Jensen Huang in a honey trap are “groundless speculation...aimed at smearing and slandering China.” Source
• Shares of major optical communications suppliers have fallen, dragged down by China’s AI slowdown. Source
• A US intelligence assessment revealed imagery of China’s secretive spaceplane and said China may field space-based directed-energy systems by the late 2020s. Source
• Profits at large Chinese industrial companies rose more than 15% year-on-year in 2026’s first nine months as AI-related manufacturing surged. Source
• Chipmaker CXMT plans to begin HBM3E production despite yields as low as 20%, as China seeks domestic AI-memory alternatives amid US technology restrictions. Source
• China’s proposed AI export controls would allow overseas customers to use Chinese AI services while restricting access to models, data and expertise needed to reproduce them independently. Source
• A Chinese national was extradited from the Netherlands and arraigned in California over an alleged cryptocurrency investment scam that took $36.9 million from 174 US victims. Source
• A US federal judge has blocked the US from denying Pentagon contracts to firms linked to Alibaba's lobbying activities. Source
• Cohere says Alibaba’s Qwen model tried to send a file to Beijing: Cohere found Qwen3.8-Flash-Next attempting to upload test data to a Beijing server, but researchers found no evidence of an Alibaba backdoor. Source
• Independent testing identified safety weaknesses in Chinese AI developer DeepSeek’s model, intensifying scrutiny of the company as governments weigh security concerns around Chinese AI. Source

India

• Jio Platforms shares jumped 21% on their market debut after raising $3.2 billion in India’s largest IPO, valuing the company at about $131.9 billion. Source
• Infosys shares fell after the IT services company cut its fiscal 2027 revenue growth outlook, flagging competitive and AI-related pressures on its business. Source
• Tata Communications plans to spend $450 million on AI connectivity infrastructure, expanding the network capacity underpinning increasingly data-intensive artificial intelligence workloads. Source
• Nvidia backed Bengaluru-based Simplismart in a $14 million Series B, supporting software designed to run AI models more efficiently and sometimes with fewer GPUs. Source

Japan

• Japanese companies hit by cyberattacks are compensating affected users as disruptive incidents create wider costs for businesses and the economy. GMO Internet Group CEO Masatoshi Kumagai has called on public and private sectors to “work together to protect Japan.” Source
• GMO Internet admitted security weaknesses in its Onamae.com Desktop Cloud after an attack potentially hit 26,739 servers, with the attacker demanding $50 million. Source

South Korea

• Samsung has apparently slashed production of mid-range Galaxy phones. It is said to be planning around a 20% cut in Galaxy A production, roughly 10 million units, as higher memory and chipset costs squeeze margins. Source
• SK Hynix expects memory demand to exceed supply through 2030 as AI infrastructure expands, despite efforts to increase semiconductor production capacity. Source
• Three financial firms reported data breaches: Bithumb suffered a mobile-system hack, Daishin Securities reported about 38,000 leaked customer records, and Mirae Asset Global Investments confirmed a hacking incident. Source
• South Korea has fined Apple and Google a combined $47.6 million for abusing their app store dominance. Source

Elsewhere in Asia

• Malaysia: Malaysian customs seized advanced AI chips worth 49.5 million ringgit ($12.11 million) while investigating suspected smuggling of high-performance semiconductors through the country’s main airport. Source
• Thailand: Thailand’s datacentre committee said it will set minimum operator standards for location, land use, fuel storage, water management, and environmental code, after new builds were blocked earlier this year. Source