Shares of Xiao-I Corporation (NASDAQ: AIXI) cratered 53.7% to $2.90 in pre-market trading, erasing the speculative premium that had propelled the micro-cap Chinese AI company since a March patent victory against Apple. The collapse came after the company disclosed that a Shanghai court had completely rejected its claims that Apple's Siri voice assistant infringes a 2004 chatbot patent — the very lawsuit the market had been betting on.

  • The Court Said the Patent Is Real, But Siri Doesn't Violate It. On June 10, the Shanghai High People's Court issued first-instance judgments in two parallel cases, dismissing all claims that Apple's Siri infringed a patent titled "A Chat Robot System" and ruling that specified iPhone models with Siri fall outside the patent's protection scope. This is a crucial distinction: a court can find a patent valid yet conclude a specific product does not infringe it — and that is exactly what happened. For shareholders, it means the patent still exists on paper but has no proven commercial value against Apple.

  • The March Rally Was Built on Hopes This Ruling Would Go the Other Way. AIXI surged nearly 90% after the Supreme People's Court rejected Apple's attempt to invalidate the patent in late March. That earlier win kept the dream alive. The mechanics were "textbook micro-cap momentum" — AIXI has virtually no Wall Street analyst coverage and extremely thin trading volume, meaning modest buying pressure generates outsized price moves. The same dynamic is now working in reverse, amplifying the selloff.

  • The Appeal Is a Hail Mary on Narrow Legal Grounds. The company "respectfully disagrees" with the findings and intends to formally lodge appeals with the Supreme People's Court within the statutory time limit. But the appeal will turn on claim construction — how broadly or narrowly the court interprets the 2004 patent's claims relative to Siri's actual implementation — a highly technical question where the first-instance court already ruled against Xiao-I.

  • Weak Finances Make the Litigation Gamble Existential. The company suffers from negative equity, ongoing losses, and negative operating cash flow.

AIXI also received dual Nasdaq deficiency notices in December for failing to maintain the $1 minimum bid price, with a compliance deadline of June 16, 2026. Without a patent windfall, the core AI services business must stand on its own — and so far, it hasn't. Xiao-I itself cautioned investors that "there is no guarantee that the Company will be awarded any financial compensation."