Shanghai Futures Exchange designs AI token derivatives in US rivalry
The Shanghai Futures Exchange is in preliminary research into futures for AI tokens, aiming to help firms hedge computing costs amid a strategic contest with American exchanges.
China is designing a futures market for AI tokens, the smallest unit of information processed by artificial intelligence models, as the Shanghai Futures Exchange seeks to compete with US exchanges developing compute power derivatives. The initiative, driven partly by the strategic rivalry with the United States, aims to allow companies along the AI supply chain to hedge against the costs of computing power.
While US exchanges like CME Group and Intercontinental Exchange prepare to launch GPU compute futures tied to the cost of renting computing power, China’s proposed product would be linked to AI tokens used for pricing AI services. All these derivative products are designed for companies to hedge against the rising cost of computing power.
The Shanghai Futures Exchange’s research into token futures product design is currently preliminary. Sources indicate it is too early to determine when token futures will be launched, and the plan is subject to change. The timeline for seeking regulatory approval from the China Securities Regulatory Commission (CSRC) is unclear.
Official data indicates China’s daily token usage increased 1,000-fold since the start of 2024, exceeding 140 trillion by the end of March. Tokens function as the digital fuel or raw material that powers AI models, serving as a measure of compute consumption.
Brokerage Baocheng Futures estimates China may debut compute futures in three to five years, citing a fragmented market as an obstacle. Meanwhile, BlackRock Chief Executive Larry Fink has suggested that surging demand for tokens could spawn an entirely new asset class in buying futures of compute.
Experts argue that token futures are critical for the technological contest between China and the US. Yilei Shao from East China Normal University noted that both nations are the only ones capable of mass-producing artificial intelligence, making the financial infrastructure around AI a key battleground.
