Shanghai Futures Exchange Designs AI Token Futures Amid China-U.S. AI Rivalry

China is designing a futures market for AI tokens, with the Shanghai Futures Exchange in the early stages of building futures contracts tied to the tokens, Reuters reported May 28.

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The plan is aimed partly at the AI rivalry with the United States, and Reuters said the exchange’s research is preliminary and has no launch date yet.

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Reuters reported that China’s daily token usage has jumped 1,000-fold since the start of 2024, reaching more than 140 trillion by the end of March, as compute shortages have forced some Chinese AI firms to ration how much users can access.

The Shanghai Futures Exchange’s proposed contracts would be tied to AI tokens used for pricing AI services, while CME Group and Intercontinental Exchange in the U.S. are preparing GPU compute futures tied to the cost of renting computing power.

Reuters quoted HashKey Group chairman and CEO Xiao Feng saying tokens function as the “digital fuel” or “raw material” that powers AI models.

In Reuters reporting, the Shanghai Futures Exchange’s token-futures research is driven partly by the AI rivalry with the U.S., and Reuters said it is too early to tell when token futures will be launched or when regulatory approval might be sought.

Yilei Shao, dean of the Shanghai AI-Finance School at East China Normal University, told Reuters that China should move sooner rather than later, calling token futures central to the contest over AI and semiconductors.

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Shao said, "The United States and China are the only two nations capable of mass-producing artificial intelligence," and Reuters added that she framed the push as part of the financial competition between China and the U.S.

BlackRock chief executive Larry Fink told a conference earlier this month that surging token demand could spawn an entirely new asset class built around compute, Reuters reported.

Reuters also said computing technology researcher Zhang Yunquan proposed the launch of compute futures to China’s parliament in March, according to official media.

Reuters said it is not clear when the Shanghai Futures Exchange would seek regulatory approval for token futures, and the exchange and the China Securities Regulatory Commission did not respond to Reuters’ request for comment.

“Finimize Pro Reuters reports the Shanghai Futures Exchange is exploring early-stage token-based derivatives, while US rivals prepare compute futures tied to rented GPU power”

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The Reuters report also said China is accelerating development of a spot market for computing power, backed by data-centre operators and AI models, and that tokens are described as a measure of compute consumption.

Reuters reported that in December, China’s official commodity index company published a series of indices tracking the country’s compute supply, which could serve as underlying benchmarks for futures contracts.

TechCrunch described the Shanghai exchange’s derivative effort as a move that would let businesses hedge against the cost of compute by targeting AI tokens, and it noted that CME Group and Intercontinental Exchange are working on futures contracts for renting GPUs.

While Reuters said China is expected to debut compute futures within three to five years, brokerage Baocheng Futures warned that the fragmented market remains an obstacle to the plan.