Several US billionaire investors reshuffle their Chinese technology stocks amid AI boom

A number of prominent U.S. investors are adjusting their positions in Chinese technology stocks due to the ongoing artificial intelligence (AI) boom, according to recent filings. Stanley Druckenmiller, a renowned investor, has returned to the market for the first time in over two years by investing in Baidu, a leading Chinese technology company.

Druckenmiller's Duquesne Family Office purchased 88,200 American depositary receipts (ADRs) of Baidu, which are US-traded securities representing shares in the Chinese firm. The investment, valued at approximately $10.1 million, marks the firm's first engagement with a US-listed Chinese company since exiting Alibaba Group Holding in the fourth quarter of 2023.

This follows Appaloosa Management, founded by billionaire investor David Tepper, increasing its stake in Baidu, nearly doubling to 1.3 million ADRs worth around $148 million during the same period. Baidu, once known for its dominant search engine, is now diversifying its efforts into AI, including its Ernie large language models, cloud computing, and autonomous driving technologies.

This shift in investment strategy contrasts with Tepper's recent move away from other Chinese internet companies, including the exit of his hedge fund from JD.com and PDD Holdings. The changes in investment strategies align with global investors' growing willingness to differentiate between China's internet giants while being more selective about the broader technology sector.

This differentiation has been reflected in the stock market as well. The Hang Seng Tech Index, which has historically been dominated by internet platforms, e-commerce companies, and electric-vehicle makers, saw a 19% decline in the first half of the year. Meanwhile, other Chinese technology benchmarks have benefited from a rally in AI and semiconductor shares.

Investment firm Oaktree Capital Management, co-founded by investor Howard Marks, also adjusted its China portfolio. It added Alibaba convertible bonds worth $750 million while reducing its holdings of JD.com convertible bonds by 27% and exited its positions in Trip.com convertible bonds and PDD Holdings.