AI Photo: VCG

　　The recent lackluster performance of China"s STAR 50 Index, which tracks the 50 largest stocks on the sci-tech innovation board, has drawn attention, with some Western media outlets seizing on the pullback to draw misleading conclusions about the country"s artificial intelligence (AI) development.

　　Reuters on Monday published an article headlined "In China, the AI bubble has already burst," interpreting the drop in the AI-heavy STAR 50 Index and the contraction in the market capitalization of AI-related listed companies as the bursting of bubbles.

　　Short-term stock price fluctuations reflect shifts in capital preferences, market expectations and valuations, and they do not necessarily signal a reversal in an industry"s fundamentals. To equate an index decline with a "bursting bubble," and to treat capital market movements as a denial of China"s AI industry prospects, is logically untenable and gives a misleading picture of China"s technological development.

　　Capital markets naturally experience cycles of rising and falling expectations and valuation corrections, and volatility in sci-tech innovation sectors is particularly fierce. This is a common phenomenon in global financial markets. The sharp pullback in AI and semiconductor-related stocks this round is essentially a correction of the overheated valuations of some targets in the earlier period, and a rational cooling of capital from excessive expectations, rather than a shake-up of the industrial foundation.