Investors Play Both Sides of US-China AI Divide Ahead of Trump-Xi Meeting

Wall Street banks are underwriting Chinese tech equity deals while Chinese capital flows into US semiconductors, as investors hedge against a bifurcated AI supply chain ahead of the Trump-Xi meeting in Washington this week. US banks have acted as bookrunners on 19 Chinese high-tech equity capital market deals worth $17.2 billion year-to-date, nearly 30% of the sector's total issuance, according to LSEG data. Goldman Sachs, Morgan Stanley, Citigroup and JPMorgan underwrote listings including Zhongji Innolight's $6.8 billion Hong Kong offering and Victory Giant Technology's $2.6 billion share sale. Meanwhile, US equity held by Hong Kong and mainland Chinese residents rose 23% over the past year to exceed $750 billion. US AI funding rounds involving China- or Hong Kong-based investors climbed to roughly $8.9 billion through mid-September, up from $436 million in 2023, per S&P Global Market Intelligence. Treasury Secretary Scott Bessent said he and Vice Premier He Lifeng discussed establishing a US-China AI dialogue with a notification system for shared goals and threats.