Chinese stocks fell Wednesday as artificial intelligence shares faced selling pressure. Hong Kong shares outperformed, driven by strong gains in internet platform companies. Investors shifted funds away from technology hardware into traditional sectors like real estate. New United States trade restrictions targeting Chinese robots also weighed on sentiment. This rotation reflects reassessment of artificial intelligence investment returns and geopolitical concerns.

China's CSI AI Index dropped 4.6% on June 26 as valuation fears and US-China tensions triggered a broad selloff in Chinese AI stocks.

Asian equities dropped as artificial intelligence spending concerns fueled chipmaker selloffs. Crude oil extended its decline, with Brent slumping significantly on Monday.…