Exclusive: Chinese technology company ByteDance is in talks with Shanghai-based Iluvatar CoreX to purchase AI chips for inference work and is also considering a similar deal with Baidu

Leverage is rapidly unwinding across Chinese stocks: Margin debt on the Shanghai and Shenzhen exchanges fell -2.8% on Friday, or -$11.7 billion, to $405 billion, the largest daily decline since January 2016. This also marks the 4th consecutive daily decrease, totaling -$36.9 billion. This comes as the Star 50 Index, which tracks Chinese technology stocks, plunged -7.1% on Friday, its 2nd-largest daily drop this year, while the CSI 300 fell -3.6%. Memory chip stocks were at the center of the selloff after attracting the highest levels of margin borrowing. As a result, their sharp selloff triggered margin calls, forcing investors to sell and accelerating the broader market decline. Chip stocks have become a global amplifier of market volatility.

On Friday, @Robostrategy filed a comment letter with the @SECGov on its proposed Registered Offering Reform (File No. S7-2026-17). We write as proponents of, and investors in, American humanoid robotics and physical AI. These industries are capital-intensive, their development cycles run long, and much of the value is created while the companies are still private. Our view is that access to public-market capital on competitive terms and from domestic sources, is one of the more consequential inputs to American innovation in the space. Where American robotics companies cannot raise that capital here, they tend to raise it abroad, and technological leadership has a way of following the funding. They also find it much harder to compete on the global stage. The SEC’s proposed reform would help address the frictions with raising capital through the public markets for young, innovative companies. It would remove the public-float and one-year seasoning gates that keep newer and smaller issuers off the streamlined shelf, and extend to listed closed-end funds the same on-demand access that seasoned operating companies already have. Chairman @PaulAtkins has described the current rules as "unnecessarily constraining" the ability of public companies to raise capital quickly, and has framed the package as part of a broader effort to encourage more companies to become and remain public. We share that reading and applaud his leadership on this issue and that of the Administration writ large. Our letter does two things. First, it endorses the proposal, and situates it within a wider, bipartisan modernization effort that runs from the @FAANews's drone framework to @NHTSAgov 's autonomous-vehicle rules to the @US_FDA 's approach to AI-enabled devices, each retiring a rule built for an earlier era while keeping the underlying protection intact. Capital formation deserves the same treatment. Second, it asks the Commission to finish the work. An automatically effective shelf does little for a closed-end fund that, under the Investment Company Act, cannot practically sell into it. Section 23(b) conditions below-NAV sales on a shareholder vote that no fund can realistically refresh for day-to-day issuance. We ask the Commission to use the exemptive authority it already holds to provide a workable, investor-protective path, with clear dilution disclosure, board oversight, and quantitative limits. We make sure to call out the elephant in the proverbial room, that being China ensuring that their robotics and AI industries have streamline access to large capital markets. Chinese technology companies have raised about $3.1 billion through mainland IPOs through mid-2026, more than five times the prior-year volume, and nearly fifty issuers were queued on the STAR Market and in Shenzhen seeking a combined 126.1 billion yuan, on the order of $18 billion. Because listing eligibility runs through state approval of a company's core technology, Beijing can steer that public capital toward its strategic priorities with a precision private venture funding does not offer. What China is doing on the capital markets front as it relates to robotics is an important reference point. We recognize the competition and its implications, but we do not view this as a contest the United States must win at another country's expense. Innovation is global, and the contributions that will build this technology will come from many places. Even so, the capital this proposal could help unlock is the kind on which American leadership in physical AI, and the national-security interests bound up with it, may ultimately depend. The full letter will be posted when the agency makes all comments available to the public.