China’s Xiao Yuanqi Warns of AI Investment Risks

Xiao Yuanqi, vice minister at China’s National Financial Regulatory Administration, expressed concerns regarding the overwhelming capital influx into artificial intelligence at the Global Financial Leaders’ Investment Summit in Hong Kong. He warned that this trend is leading to excessive concentration of investment in AI and a few leading technology firms, which could increase leverage and promote rapid expansion.

This concentration could negatively impact traditional industries by raising borrowing costs and reducing their ability to reinvest and expand. In 2025, AI companies attracted $258.7 billion of the $427.1 billion in global venture-capital investments, representing 61% of the total, a significant increase from 30% in 2022.

Additionally, mega deals in the AI sector accounted for 73% of total investment value, with US-based companies receiving about 75% of global AI venture investment. The OECD also noted a similar concentration in global greenfield investment in strategic sectors like data centers and semiconductors.