DeepSeek's AI Breakthrough Sparks Chinese Tech Rally and Global Market Shifts

Chinese AI companies celebrate DeepSeek, shrug off global curbs

Chinese tech companies shrugged off foreign scrutiny of upstart chatbot maker DeepSeek, telling AFP on Friday they were confident the country's tech startups would make more gains in the global artificial intelligence race. Hangzhou-based DeepSeek's R1 chatbot stunned industry insiders and became a hero of China's AI sector last month with its ability to match the functions of its Western competitors at a fraction of the cost. But concerns about the app's handling of users' personal data have pushed countries including South Korea, Italy, Australia and some US states to ban or restrict its use. "In the past few years, China has faced all sorts of restrictions (especially) from the US," Sun Dasheng, an employee of AI server maker Puersai Computer, told AFP at Shanghai's Global AI Developers' Conference. "But our country is currently sparing no effort to move forward," he said. Sun's enthusiasm was echoed by other exhibitors at the industry fair, who proudly advertised that they were using DeepSeek's open-source software on their banners and posters despite the company's absence from the expo on Friday. Humanoid robots were displayed across the venue including the model that danced for a TV audience of millions on state broadcaster CCTV's annual Lunar New Year programme last month. "Now that the (R1) model is available, we believe the industries or products related to these large language models will develop even better," said Mark Feng, a product manager at chatbot maker Mobvoi. Prior to DeepSeek's emergence, people believed China "could not make a large (AI) model on par with the United States", Lian Feng, an employee of Shanghai-based company Tiangang AI Trading Platform, told AFP. China has shown it can produce the advanced software in addition to its existing control of large parts of the supply chain, giving it an edge over the United States, Lian said. 'Wake-up call' US President Donald Trump has called DeepSeek's release a "wake-up call" for American companies, highlighting how cheaply the R1 app was developed. DeepSeek says it only spent $5.6 million on the project, a fraction of a $500-billion AI project sponsored by Trump. Lian, the Tiangang AI Trading Platform employee, said he saw DeepSeek's current success as a groundbreaking event similar to the release of iPhone competitor Android's cheaper and ultimately more popular operating system in 2008. The high price tag of Apple's iPhones, which had dominated the smartphone market up to that point, "obstructed the explosive growth of smartphones and of the mobile internet era", Lian said. Lian said he believed DeepSeek would dramatically change the generative AI market much like how the introduction of Android phones permanently altered the smartphone industry. "I believe there is still room for us to grow... I think in three or five years we will see an even better picture," Sun from Puersai Computer told AFP.

DeepSeek-led AI adoption offers China an opportunity to boost its sputtering growth

This week's news that the DeepSeek Chatbot app, developed by China, was downloaded from the Apple app store significantly more times than the US-developed ChatGPT from Open AI, wiped billions off the global tech market. DeepSeek's sudden splash in the large language model space has given China a powerful tool to catalyze artificial-intelligence adoption in the country and boost economic growth. While Goldman Sachs pegs a 20-basis-point to 30-basis-point boost to China's GDP over the long term -- by 2030 -- its expects the country's economy to start reflecting the positive impact of AI adoption from next year itself as AI-driven automation improves productivity. "The recent emergence of DeepSeek ... suggests faster AI development and adoption in China than we previously anticipated," economists at the Wall Street bank said. The enthusiasm around DeepSeek is also being reflected in the sharp rally in China stocks, with the MSCI China index soaring over 21% from its January low, according to LSEG data. The startup's rise is triggering a reassessment of China's "investability" after an extended period of limited attention, Morgan Stanley said in a note this week. "DeepSeek demonstrates that China is at or near the cutting edge of AI development, which boosts the prestige of China's economy and tech ecosystem, making them more attractive for global investors," said Gabriel Wildau, managing director at Teneo. The company's launch of a cheaper and more efficient AI model came as a timely confidence boost as the Chinese leadership faces a prolonged economic gloom, partly owed to the slump in its property market, while the specter of a fierce trade war with the U.S. looms large. DeepSeek's R-1 reasoning model has been lauded as being able to match, or even outperform, leading global AI offerings amid claims of running on cheaper and less sophisticated chips. The open-source model also can be repurposed by developers outside the company to significantly boost efficiency at a lower operating costs. The startup has shaken China's AI ecosystem as well, with state-owned entities as well as large tech players, including competitors, leveraging its open-sourced architecture. "The scale and speed of [AI] adoption [in China] is amazingly fast right now, and it's not slowing down," said Wei Sun, principal analyst of artificial intelligence at Counterpoint Research.

China's Tiger Brokers Adopts DeepSeek AI as Other Countries Move to Ban It

DeepSeek's success has been met with pushback from global regulators. On Tuesday, Feb. 18, China-based online broker Tiger Brokers announced that it had launched DeepSeek's model into its AI-powered chatbot. The move comes as China's finance industry has rushed to take advantage of DeepSeek's runaway success -- while other countries have made moves to ban the disruptive startup. Tiger Brokers Deploy DeepSeek According to a company release , DeepSeek's R1 model will be deployed into the Tiger Brokers chatbot, TigerGPT. This will allow DeepSeek to work with Tiger's financial data and aid customers in trading decisions. Wu Tianhua, founder and CEO of Tiger Brokers, said the company will also use the model to help customers analyze valuations. "The upgraded TigerGPT offers professional investment insights, empowering both novice investors and experienced professionals to make more informed decisions in complex market conditions, ultimately driving long-term investment value," Tianhua added. Since launching in 2023, TigerGPT has been consistently integrating new AI technology into its model. TigerGPT reportedly serves over 110,000 users globally with financial queries. DeepSeek's Impact on China The launch of DeepSeek-R1 has reshaped China's place in the global AI race by demonstrating a breakthrough performance without the need for massive hardware investments. The company's low-cost approach has rattled established industry players. This is evidenced by the dramatic increase in Chinese tech stocks, as investors put more faith in the country's capabilities amid continued tensions with the U.S. DeepSeek's open-source model has driven the rapid deployment of AI applications within finance, e-commerce, and other industries. Over 20 Chinese brokers and investment firms have reportedly begun to integrate DeepSeek into their business, Reuters reported . At the same time, DeepSeek's success coincided with a steep drop in U.S. market reactions, like that of leading chipmaker Nvidia. DeepSeek's AI Race Impact The ripple effects of DeepSeek's breakthrough have caused some experts to reassess how global companies are developing AI. DeepSeek has challenged the long-thought notion that cutting-edge AI requires massive capital expenditure and specialized infrastructure. After DeepSeek raced to the top of the U.S. Apple app store charts, reports of the AI model's apparent cheap development cast doubt over America's leading U.S. firms. DeepSeek's success has been met with pushback from global regulators due to concerns surrounding national security and data protection. On January 29, Wiz Research published a report warning that a DeepSeek database had been left exposed, exposing "over a million lines of log streams with highly sensitive information." At the time of reporting, five countries have either outright banned or restricted DeepSeek.

DeepSeek Adoption Sparks $1.3T China Stock Surge as Funds Pull Out of India

To buy Chinese stocks, investors have reallocated capital from India. In the space of a month, global investors who are optimistic about DeepSeek's AI breakthrough have channeled more than $1.3 trillion into China's stock market. Meanwhile, as institutional investors redirect capital toward China's booming technology market, Indian companies have lost more than $720 billion of market capitalization, a recent analysis found. China's Gain Is India's Loss Since DeepSeek R1 was released on Jan. 20, the Shanghai Composite and the FTSE China have gained over $200 billion in market capitalization each. Other mainland indices and Hong Kong's Hang Seng also registered significant gains in the same period. In contrast, India's BSE Sensex and Nifty 50 have both declined since the beginning of February. An analysis of regional allocations by some of the largest Asian equity funds reveals that most have reduced their exposure to Indian stock and increased their Chinese holdings in recent months. According to Goldman Sachs , so far in 2025, Chinese equities have been the "most notionally net bought market" on the bank's prime brokerage book. Meanwhile, hedge funds purchased more Chinese stock in the first week of February than in any week since October. China's latest market rally comes at a time of uncertainty for the country's economy. American tariffs on Chinese goods pose the highest risk to manufacturing businesses and exporters. However, Beijing's retaliatory measures will also be felt by firms that import from the U.S. Against this backdrop, surging share prices can be attributed to two factors: the expectation of government tariff relief and optimism surrounding the country's AI success. With DeepSeek offering world-leading AI models at a fraction of the price of its American counterparts, Chinese companies have been among the first to embrace the new technology. Big Tech giants Tencent and Baidu are both exploring the possibility of integrating DeepSeek R1 into their respective platforms: WeChat and Baidu Search. Interestingly, both companies have embraced the new model despite operating their own rival AI platforms -- Tencent's Yuanbao and Baidu's Ernie. DeepSeek's success has also lit a fire under China's open-source AI scene. Having resisted opening up its proprietary AI platform for years, on Feb. 14, Baidu announced that the next Ernie model would be free to use and modify, bringing it in line with open-source alternatives from DeepSeek and Alibaba. Tencent Stock Rallies on WeChat-DeepSeek Integration News After Tencent announced on Sunday that it was testing a new WeChat feature powered by DeepSeek R1, the firm's share price surged, climbing nearly four percent in 24 hours. The pilot feature uses DeepSeek's model to power WeChat's AI search, which currently relies on Yuanbao. Meanwhile, Tencent is also considering integrating R1 into other products, including its code assistant and the Yuanbao chatbot itself, Reuters reported.

DeepSeek Trigger: AI hype supercharges Chinese stocks to a 3-year high

Chinese stocks in Hong Kong extended a recent rally as the nation's growing capabilities in artificial intelligence boosted optimism over the market's outlook, while a potentially momentous show of support for the private sector gave sentiment an extra lift. The Hang Seng China Enterprises Index jumped 4.1% on Friday to hit the highest since February 2022 -- surpassing an October peak spurred by a stimulus blitz. Gains in Alibaba Group Holding Ltd., the biggest boost to the gauge, accelerated in the afternoon session after Bloomberg News reported that its co-founder Jack Ma and other prominent entrepreneurs were invited to meet the nation's top leaders. "The Xi-Ma news gave the market another kick and prompted people to look at this 'widely shunned' space -- Chinese Internet," said Jian Shi Cortesi, a portfolio manager at Gam Investment Management in Zurich. "Either we see a sustained rally this time, or the government will keep trying until we see that rally." The meeting, which President Xi Jinping is expected to attend, has the potential to send a powerful signal that China's Communist Party is adopting a more supportive stance toward private-sector companies that fuel most of the country's economic growth. It is likely to take place as soon as next week and may include DeepSeek founder Liang Wenfeng, said people familiar with the matter. Enthusiasm for the nation's technology shares has deepened as China is fast catching up with the global AI frenzy after missing out in the past few years. AI startup DeepSeek's prowess has served as a wake-up call for investors who underestimated the nation's growth potential in the sector, and led to a broader re-evaluation of the beaten-down equity market. The DeepSeek revelation "is a reflection that China is making progress on its new productive forces and self sufficiency goals," said Marvin Chen, a Bloomberg Intelligence strategist. "The tech momentum may carry the market into March," when attention turns to the Two Sessions meeting and corporate earnings as the next driver, he added. Shares of Tencent Holdings Ltd. were also boosted in the rally, which in turn helped lift its major stakeholder Naspers Ltd. to its highest level on record in South Africa on Friday. Adding to the wave of optimism are signs that Donald Trump's tariffs on Chinese products -- 10% in the initial offensive -- may turn out to be less drastic than feared. Mainland investors have been snapping up Hong Kong shares as the rally extended. They bought HK$7.7 billion ($989 million) of the city's equities on a net basis on Friday after selling the previous day. While global money managers have been burnt by the Chinese market's ups and downs over the past few years, some now see the odds of a more durable rally this time around. Deutsche Bank called the ongoing tech progress a "Sputnik moment" for the country, while a trader note by Goldman Sachs Group Inc. said hedge funds are purchasing Chinese shares in large chunks, driven almost entirely by long buys. But skeptics worry that the AI buzz may have taken the rally too far, with stocks that announce any cooperation with DeepSeek seeing knee-jerk gains. "At the end of the day, you don't really know what the potential monetization opportunities are over the medium to longer term," Helen Zhu, chief investment officer for NF Trinity, said in a Bloomberg TV interview. There's "potential uncertainty on whether what DeepSeek has been able to do can be repeated," she added. READ: OpenAI's New Model Will Test China's Equity Rally: Taking Stock Bulls are hoping Beijing will unleash further stimulus at the Two Sessions -- the annual meetings of China's top legislative and advisory bodies -- helping to sustain the market's upward trend. Added policy support is crucial with the property sector still struggling and the economy remaining lackluster. The Hang Sang China Enterprises Index has gained 14% so far in 2025, making it the best performer in Asia.

DeepSeek drives $1.3 Trillion China stock rally as funds pile in

DeepSeek's breakthrough in artificial intelligence is helping drive a rotation of stock funds back into China from India. Hedge funds have been piling into Chinese equities at the fastest pace in months as bullishness on the DeepSeek-driven technology rally adds to hopes for more economic stimulus. In contrast, India is suffering a record exodus of cash on concerns over waning macro growth, slowing corporate earnings and expensive stock valuations. China's onshore and offshore equity markets have added more than $1.3 trillion in total value in just the past month amid such reallocations, while India's market has shrunk by more than $720 billion. The MSCI China Index is on track to outperform its Indian counterpart for a third-straight month, the longest such streak in two years. DeepSeek has shown "that China actually has companies that are forming a vital part of the whole AI ecosystem," said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments. His firm has been adding Chinese internet holdings over the past few months, while trimming smaller Indian stocks that had "run up way past their valuation multiples." The rotation marks an about-face from the pivot into India seen over the past several years, luring funds away from China. That was based on an India's infrastructure spending splurge and its potential as an alternative manufacturing hub to China. Domestic-focused India has also been seen as a relative haven amid Donald Trump's tariff plans. China looks to be regaining its former appeal on a fundamental reevaluation of its investability, especially in tech. After scaring investors with corporate crackdowns not long ago, Beijing may actually help push the new AI theme, as indicated by the news that entrepreneurs including Alibaba Group Holding Ltd. co-founder Jack Ma have been invited to meet the nation's top leaders. DeepSeek-related developments are likely to help boost China's economy as well as its markets, providing an extended boost, said Vivek Dhawan, a fund manager at Candriam. "If you put all the pieces together, China becomes more attractive than India in the current set-up on a risk-reward basis." The valuation differential adds to China's allure as well. The MSCI China Index is trading at just 11 times forward earnings estimates, compared with about 21 times for the MSCI India Index. An analysis of Bloomberg data on regional allocations by some of the largest active Asian equity funds shows most are reducing exposure to Indian equities and adding Chinese stocks in recent months. While DeepSeek has helped accelerate the flows into China, possible upcoming announcements of further Chinese stimulus remain important as well, according to Andrew Swan, head of Asia ex-Japan equities at Man Group. "We think policy will now shift toward consumption, and a targeted attempt to encourage the currently high levels of savings to be deployed," said Swan. The Man Asia Ex-Japan Equity fund he manages increased its China exposure to 40 per cent from 30 per cent in the past year while trimming its India exposure to 18% from 21 per cent. A complete reversal in fund flows is unlikely, with India stock bulls including Morgan Stanley saying the recent correction may be overdone and the nation's long-term growth story remains intact. Meanwhile, the additional 10 per cent tariffs imposed on China by Trump have reinforced Amundi SA's neutral stance on Chinese equities, according to Asia senior investment strategist Aidan Yao. "While a truce is possible as the two sides converge in trade talks, the external dynamics will remain fluid and challenging for China in the foreseeable future." There's also skepticism among traders who have been burned by failed China rallies in the past. Some have pointed to crowded trading and increasing valuations as reason for caution. Helen Zhu, chief investment officer at Nan Fung Trinity HK Ltd., sees uncertainty over whether DeepSeek's AI success can be repeated. "At the end of the day, you don't really know what the potential monetization opportunities are over the medium to longer term," she said. Nonetheless, there's a palpable buzz of "China's back" in the markets of late. The positives keep piling up, with Alibaba adding $100 billion in market value over the past five weeks and the Hang Seng Tech Index entering a bull market. "The DeepSeek news was a well-timed and impactful catalyst that market participants were able to build a case for a reentry" into Chinese markets, said Nicole Wong, a portfolio manager at Manulife Investment Management. "From a tactical standpoint, we think it makes sense to be taking advantage of this momentum." --With assistance from Chiranjivi Chakraborty, Abhishek Vishnoi, Mary Nicola and Joanne Wong.

Tiger Brokers adopts DeepSeek model as Chinese brokerages, funds rush to embrace AI

The integration of the DeepSeek-R1 model into TigerGPT follows DeepSeek's meteoric rise which stunned Silicon Valley and triggered a rally in Chinese tech shares on bets of an AI revolution sweeping across sectors from education to finance.Tiger Brokers said on Tuesday it embedded DeepSeek's model into its AI-powered chatbot, as brokerages and money managers race to capitalise on the Chinese start-up's artificial intelligence breakthrough, and develop use cases for the financial industry. Tiger Brokers, an online broker backed by shareholders including Chinese electronics maker Xiaomi and renowned U.S. investor Jim Rogers, is the latest to embrace DeepSeek. At least 20 Chinese brokers and fund managers, including Sinolink Securities, CICC Wealth Management and China Universal Asset Management, have already started to integrate DeepSeek models into their businesses, potentially changing the way they conduct research, manage risks, make investment decisions and interact with clients. DeepSeek will be able to tap Tiger Brokers' financial data and help customers analyse valuations, make trading decisions and "feel the beauty of investment," said Wu Tianhua, Tiger Brokers' founder and CEO. "Its impact is real. It's no longer a concept, or a marketing trick," he told Reuters in an interview. UBS expects rapid AI adoption will boost financial IT spending by 24%, or 69 billion yuan ($9.49 billion), in five years, benefiting vendors including Hundsun Technologies Inc, Northking Information Technology Co and iSoftStone Information Technology (Group) Co. "We expect the launch of DeepSeek R1 to drive faster GenAI adoption in the financial industry in 2025," UBS analyst Haifeng Cao said, referring to DeepSeek's recently released model that was developed at a fraction of the cost of Western rivals. "We think the industry is likely to be more profoundly reshaped by GenAI than others, given its data-heavy and high labour intensive characteristics, and high mix of language-related tasks." An index tracking China's Fintech companies has jumped 17% this month, flirting with record highs. Inspiring Tiger Brokers said the upgraded version of its investment assistant TigerGPT will initially be available for free to users in mainland China and Singapore. "The integration of DeepSeek has enhanced TigerGPT's logical reasoning abilities, enabling it to analyse market shifts more clearly and interpret investment opportunities more effectively," CEO Wu said. The chain of thoughts generated by the DeepSeek model "is often inspiring to even most seasoned traders." Sinolink Securities, which sees AI as a key engine of growth, said early this month it would use the DeepSeek model in a range of scenarios including information search, market analysis and industry research. In the future, the application will be expanded to core business areas such as risks management and investing. CICC Wealth Management said its has integrated DeepSeek's R1 model into its investment advisory services, potentially boosting information processing efficiency by 90%. Zhongou Fund Management said the immediate challenge for the financial industry is to standardize internal database to feed AI models. "AI has given financial companies a tool to make better use of troves of data" which was previously sitting idle, said Zhongou's head of tech research Du Houliang. "Now, many financial institutions, including us, are hurrying into meetings" to discuss how local adoption of DeepSeek's models can empower internal management, marketing, and investing.

DeepSeek drives $1.3 trillion China stock rally as funds pile in

DeepSeek's breakthrough in artificial intelligence is helping drive a rotation of stock funds back into China from India. Hedge funds have been piling into Chinese equities at the fastest pace in months as bullishness on the DeepSeek-driven technology rally adds to hopes for more economic stimulus. In contrast, India is suffering a record exodus of cash on concerns over waning macro growth, slowing corporate earnings and expensive stock valuations. China's onshore and offshore equity markets have added more than $1.3 trillion in total value in just the past month amid such reallocations, while India's market has shrunk by more than $720 billion. The MSCI China Index is on track to outperform its Indian counterpart for a third-straight month, the longest such streak in two years.

DeepSeek, Tariff Relief Drive Rally in Chinese Tech Stocks

A benchmark for Chinese technology stocks rose for a fifth straight week, hitting a three-year high as China's largest companies in the sector continued to be buoyed by bullish sentiment thanks to homegrown AI upstart DeepSeek and relief over delayed U.S. tariffs. The Hang Seng Tech Index, which tracks the 30 largest technology companies listed in Hong Kong, advanced 5.6% on Friday, bringing its gains this year to 24%. The index topped an October high that came after Beijing raised hopes for more government support and fiscal stimulus measures to boost the economy. The sudden emergence of Chinese AI company DeepSeek hit U.S. technology stocks two weeks ago and has fueled investors' optimism in China's tech shares. Chinese video-streaming company Bilibili and AI company SenseTime Group were among the session's top gainers, advancing 15% and 7.7%, respectively. Alibaba Group's shares touched a three-year high, while e-commerce giant JD.com climbed 7.6% and Tencent gained 7.4%. Chinese health-tech stocks were broadly higher in Hong Kong. Alibaba Health Information Technology surged 29% and JD Health International increased 7.6%. Artificial intelligence is driving new opportunities in the healthcare sector, with various players adopting DeepSeek, which is helping to speed up AI integration in the industry, Bocom International analyst Ethan Ding said in a note. China's recent AI breakthrough could boost the efficiency of its healthcare sector and enable other potential novel services, Jefferies analyst Cui Cui said. These stocks aren't direct beneficiaries of the AI concept, but they likely rallied due to their significant underweight positions and the fundamental shift in market sentiment after the Biosecure Act wasn't passed under the Biden administration, Cui said in an email. Whether the DeepSeek-driven rally has more room to run remains to be seen. HSBC analysts said near-term headwinds could emerge for China's AI-related stocks. AI-related stocks, ranging from hardware to software and applications, currently account for more than 50% of the A share market turnover, though they make up only 15% of the market capitalization, they said in a research note. The analysts cautioned that these stocks could have stretched valuations, with their shares trading at the high end of their historical prices since 2019. Still, from a long-term perspective, these tech stocks have sufficient upside for a rerating, the analysts said. China's "stock market has yet to reflect China's improving innovation capability," they said. The market mood was also supported by relief over a lack of reciprocal tariffs for now. The dollar fell to a two-month low against a basket of currencies after President Trump announced plans for reciprocal tariffs to be assessed by country, stopping short of imposing the levies immediately, as many foreign capitals feared. Markets are temporarily shaking off the threat of reciprocal tariffs, ING strategists said in a note. "But reading through the details of the basis on which reciprocal tariffs will be delivered is mind-blowing," they said, adding that factors like various subsidies, regulations and import tariffs would have to be considered country by country in reports that U.S. federal agencies are expected to deliver by April 1. "Markets found a renewed sense of relief overnight, as initial worries over the implementation of U.S. reciprocal tariffs this week did not materialize," said Yeap Jung Rong, market strategist at IG. The "dynamics seems different from the 'strike first, talk later' approach seen in the 2018 trade war," Yeap said in a note. This renewed strategy gives "trading partners some runway for negotiations and room for consensus to be reached," he said.