If you pump unlimited investment dollars into unlimited investments, what tends to happen is that your investees and their employees/suppliers walk off with a lot of money and don't produce any goods or services that result in a sustainable competitive advantage. This is basically the definition of a bubble, and has happened over and over again, from Bitcoin to mobile to subprime mortgages to Web 2.0 to .com to AI to savings & loans. You need some sort of financial constraint - usually the threat of bankruptcy - to create an incentive to invest efficiently, where you make choices about where to allocate resources such that your firm is more competitive than everyone else.

Spreading a small amount of money across a large number of investments within a sector usually works out pretty well, though. This is a diversified portfolio, and basically it means you're betting that someone in the sector will succeed without taking a position on who that will be. If you know that the market exists and the technology is attainable, it makes a lot of sense.

These are private market investments, so nobody is crunching any numbers for them and producing a valuation, they pay for this out of pocket. A small VC would lose with an "invest everywhere" strategy, each new investment grows sunken cost of valuating and negotiating an investment.

But there is a force in the other direction: each investment can only bear so much new capital without losing marginal value. So after a while you have to start to look for new investments to spread your capital around.

There is probably a ton of money behind these chinese investments, and a relatively small total market for venture capital, so they end up making a lot of investments.