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Quoting a friend's opinion:

The real reason for today's market decline is not "rare earths choking AI" or "new tariff disputes constraining AI progress," but investors scaring themselves.

This round of rare earth export controls is indeed "stricter," including so-called "long-arm jurisdiction," but interpreting it as "global AI will collapse because of this" is a misreading born of ignorance about technological pathways.

Rare earths affect equipment consumables and electromechanical systems, permanent magnets for motors—impacting new energy vehicles and wind turbines...

Rare earths aren't key raw materials for GPUs; chips themselves contain almost none. The real impact is at the equipment level: corrosion-resistant coatings for etching chambers, polishing consumables, servo motors, and permanent magnet components. These determine delivery timelines and maintenance costs, not the computational limits of models.

They influence "delivery schedules" and "pace," not "capability" and "direction." Without rare earths, OpenAI model training might be delayed by two weeks, not directly paralyzed.

Whether AI can develop depends not on rare earths but on computing power, data, algorithms, funding, and electricity.

Because the market was already in a "high-tension" position: AI sector valuations had reached levels comparable to the 2001 tech bubble, with several high-beta stocks hitting new highs last week, prices far outpacing fundamentals. Once negative policies + Trump's remarks + Chinese stock plunges + rare earth chokehold expectations emerged, quantitative models triggered a chain reaction, and the stampede naturally followed.

Disaster narratives are, by nature, exaggerated performances in capital markets.