DeepSeek: The Catalyst for China's AI Revolution

In early 2025, a relatively unknown company from Hangzhou, China, named DeepSeek, launched a technological blitz that marked the beginning of a new era in AI. With its innovative AI models, DeepSeek has not only captured global attention but also reshaped the landscape of AI technology, challenging the dominance of international giants like OpenAI.

DeepSeek’s success has catalyzed a reevaluation of Chinese tech assets, leading to a significant surge in the Hang Seng Tech Index, which rose by 24.62% by the end of February 2025. The A-share market also responded enthusiastically, with the Wind DeepSeek concept index increasing by 35.51% since its launch on January 27.

Fund managers like Xiao Ruijin, Zhou Jian Sheng, Li Yaozhu, and Liu Jiang have highlighted several key investment opportunities driven by DeepSeek’s innovations:

• Algorithmic Innovation: DeepSeek’s breakthroughs in algorithmic efficiency and cost reduction have opened up new avenues for AI applications, making it a leader in the field.
• Domestic Chip Development: The demand for domestic AI chips is expected to rise as DeepSeek’s models integrate with local hardware, offering opportunities for chip manufacturers.
• Vertical Applications: DeepSeek’s low-cost, open-source models are accelerating AI adoption in industries like healthcare, manufacturing, and education.
• Edge AI: The growth of edge AI applications in devices such as smartphones and IoT devices presents significant opportunities for innovation.

To assess the sustainability of these opportunities, investors should consider factors such as technological innovation, commercialization capabilities, ecosystem development, and policy support. While there are risks associated with technological disruption and geopolitical factors, the long-term potential of AI investments remains promising.

Sources: Cropink, SEO.AI, Reuters, Morgan Stanley