China’s tech darlings are losing their shine. Here’s what’s behind the sell-off

China's technology stocks are losing their luster as investors question whether the country's artificial intelligence boom can deliver profits strong enough to justify lofty valuations. The STAR 50 Index plunged over 40% from its July peak as concerns mount over returns on AI investments. The index tracks 50 of the largest and most liquid companies on Shanghai's technology-focused STAR Market — home to semiconductor, artificial intelligence and other high-tech firms. Even battery giant CATL , long considered one of China's technology success stories, has come under pressure, falling 37% since the start of the year.