‼️Chinese AI stocks are falling: Shares of Chinese AI developers plunged after reports that regulators opened a probe into DeepSeek and Moonshot AI over data-security concerns. Z(dot)AI fell as much as -12%, while MiniMax dropped -6.8% and Alibaba slid nearly -5% in Hong Kong. The selling spread across the broader Chinese tech sector, with Xiaomi falling -3.8% and Tencent declining -2.9%. The new probe centers on whether DeepSeek and Moonshot sent sensitive Chinese user data to Anthropic’s Claude models while using Claude’s responses to improve their own AI systems. Investors are increasingly concerned that tighter regulatory scrutiny could slow China’s AI development, particularly as companies accelerate the rollout of new models such as Moonshot’s Kimi K3 and Alibaba’s Qwen3.8-Max. Any slowdown could become more significant as US competitors including OpenAI and Anthropic continue advancing their models and competing more aggressively on price. Chinese AI stocks are facing growing regulatory uncertainty just as competition intensifies.