As the Trump-Xi meeting in Beijing approaches, investors are making it clear they do not want geopolitics to disrupt the artificial intelligence boom.
Fund managers and strategists are less concerned about tariffs than in previous U.S.-China disputes. Instead, they are watching to see if Washington will ease chip export restrictions that impact China’s AI supply chain.
The summit as a “test over AI control” and noted that the stakes for AI security are much higher ahead of President Donald Trump’s first visit to China in almost nine years.
AI has replaced trade as the market’s main obsession
This change is clear in the markets.
Reuters said China’s yuan has reached a three-year high, and the Shanghai Composite is at its highest level in 11 years. These are signs that investors are backing China’s focus on technology rather than expecting more trade-war turmoil.
Export growth is being driven by AI-related orders, and investors are shifting their portfolios to support China’s push for AI self-sufficiency.
CNBC points out that political risks around AI are now as important as trade, but for investors, AI is now the main story.
Investors are watching chips more than diplomacy
The best evidence of this shift is what investors themselves are saying.
Zeng Wanping, a fund manager at Beijing Monolith Fund Management, said the “only thing worth monitoring is development around AI” and that it is the market’s “top focus, no other.”
Investors are closely watching whether the U.S. will allow more advanced Nvidia chips to be sold in China, a move that would impact both China’s AI progress and local chipmakers.
CNBC’s focus on “AI control” matches this view: for markets, the main question is not whether Trump and Xi achieve a big diplomatic breakthrough, but whether they avoid putting more political pressure on the technologies driving the rally.
A calmer relationship is helping the AI trade
Today’s mood is very different from previous years, when Chinese assets reacted sharply to trade and tariff news.
The calmer atmosphere is partly because Trump and Xi paused their trade war six months ago, and U.S. courts have removed many of Trump’s original tariffs.
Investors shared that they expect relations to stay stable for now, even though issues like Taiwan, rare earths, nuclear weapons, and the U.S.-Israeli war on Iran could still cause concern.
That is why markets want both leaders to avoid interfering with AI: investors do not need them to agree on everything, just to avoid making AI the next source of conflict.
The rally now depends on what leaders do not do
The expected attendance of top U.S. business leaders at the summit has raised hopes for deals in finance, agriculture, energy, and aircraft.
Still, traders are mainly focused on what has already been driving prices: the global AI boom. This marks a big change. In the past, markets reacted to every trade headline.
Now, they seem to believe that as long as Trump or Xi do not disrupt the sector, AI momentum will continue.
