Goldman Sachs Says the AI Trade Is Splitting Into US and China Ecosystems

Goldman Sachs says investors may need to stop treating AI as one global investment theme. The firm’s strategists describe two increasingly distinct ecosystems: one centered on the US and key trading partners, and another taking shape in China.

The shift reflects geopolitical, national security, and growth considerations. Goldman’s framing suggests AI exposure may now depend as much on where companies sit in the global supply chain as on their technology credentials.

Goldman pointed to breakthroughs by DeepSeek and Kimi in large language models, along with advances in semiconductor packaging and computing, biological engineering, and aerospace. The bank said China is no longer just a major supplier to the global AI buildout.

Instead, China is building an ecosystem spanning advanced chips, open-weight large language models, and AI applications that could compete with the US-led system. Goldman’s strategists wrote that the technology gaps between China and the West appear to be narrowing, while noting China remains several generations behind at the leading edge of semiconductors.

Goldman now divides Chinese AI stocks into two groups: exporters tied to Western AI spending, and domestic companies benefiting from China’s own AI investment, adoption, and policy support. Exporters are more exposed to global AI investment trends and geopolitics, while domestic names are more tied to Chinese spending and government policy.

That difference is already showing up in performance, according to Goldman. Chinese AI exporters gained 126% from early 2025 through June 2026 before falling 23% from their peak during the global AI selloff, while domestic AI companies held up better after the correction.

Goldman said nearly $5 trillion in market value has been created in Chinese AI-related public equities since the “DeepSeek moment” in early 2025, through share price gains and IPOs. AI-related stocks now account for 42% of the combined stock market value of Chinese stocks listed in mainland China and Hong Kong, up from 24% in 2024.

Their share of trading turnover has also risen to 57% from 48%. The takeaway for investors: Chinese AI is no longer just a supply-chain story, and the distinction between exporter exposure and domestic-policy exposure is becoming central to the trade.