Despite an ongoing race between China and the US to develop separate AI supply chains, investors from both sides are maintaining significant financial ties. US banks have acted as bookrunners for 19 Chinese high-tech equity capital market deals totaling $17.2 billion this year, representing nearly 30% of the sector's total issuance. Simultaneously, Chinese outbound mutual funds are directing substantial capital towards US technology, particularly semiconductors. The value of US equities held by Hong Kong residents and mainland Chinese investors has surged by 23% in the past year, exceeding $750 billion.
Several major Wall Street banks have been instrumental in these cross-border investments. Goldman Sachs, Morgan Stanley, and Citigroup were joint global coordinators for the $6.8 billion Hong Kong listing of optical parts maker Zhongji Innolight. Goldman and Morgan Stanley also facilitated Hong Kong listings for AI developer MiniMax, and chipmakers Montage Technology and Shanghai Iluvatar CoreX Semiconductor. JPMorgan underwrote a roughly $2.6 billion Hong Kong share sale for Victory Giant Technology, a manufacturer of printed circuit boards for AI servers. US banks also appear in the shareholder registers of chipmakers on Shanghai's STAR Market, serving as conduits for global capital into the sector.
Chinese investment in US AI has also seen a dramatic increase. According to S&P Global Market Intelligence, the total value of US AI funding rounds involving investors from China or Hong Kong climbed sharply from about $436 million in 2023 to approximately $8.9 billion through mid-September. Chinese outbound mutual funds manage $150 billion, with US stocks, particularly tech shares, accounting for nearly half of this amount. Significant increases in Chinese holdings have been observed this year in US chipmakers such as Micron Technology, AMD, Sandisk Corp, Lam Research, and Applied Materials.
