Chinese AI Models Trigger Wall Street Selloff as GLM5.2 Undercuts Rivals on Price

Wall Street institutions warned this week that low-cost Chinese AI models are reshaping the industry's competitive landscape, triggering a broader selloff in U.S. tech stocks. According to Jefferies and Morgan Stanley analysts, Zhipu's newly launched GLM5.2 model achieves performance comparable to Anthropic's flagship offering while cutting inference costs to roughly one-quarter of its rival.

Micron Technology shares fell over 7% on Friday, with Advanced Micro Devices and Intel both declining more than 4%, while Oracle dropped approximately 19% over five trading days. Analysts attributed the pressure to growing concerns that enterprises will shift workloads toward cheaper alternatives as model performance gaps narrow, potentially reshaping investment logic across AI infrastructure, GPUs, and data centers.