Investors scramble to make sense of a shock Chinese challenge to the dominance of western chipmakers

Even for the rollercoaster world of AI, last week was particularly volatile as investors scrambled to keep up with developments that threatened the dominance of the largest western chipmakers.

It began with a double whammy. On Monday, the Chinese memory chipmaker CXMT floated on the Shanghai stock market, soaring by 466% in value to 3.3tn yuan (£365bn).

Does a thought-experiment about US ascendancy in the technology say as much about AI jitters as it does about the reality?

It’s 2031 and the US and China are about to tear Europe into pieces.

The US ploughed vast sums into datacentres and the EU did not. China built robots and Europe did not. American companies “restructured” their workflows around AI and fired people, while EU workers went on long lunch breaks and handed over administrative tasks to the AI model Claude.