DeepSeek: A Turning Point for China in the AI Landscape

The launch of DeepSeek has shaken the global perception that it could contain China in the realm of technology. Deutsche Bank has described the rise of this artificial intelligence (AI) technology as China’s ‘Sputnik moment,’ alluding to the historical event in 1957 when the Soviet Union launched the first artificial satellite, drastically changing global perceptions of its capabilities. This comparison highlights DeepSeek's achievement as a pivotal moment not only for AI but for China's position in the competitive global landscape.

Deutsche Bank emphasized that 2025 would be the year when investors worldwide recognize that China is outperforming the rest of the world in various sectors. In a report titled “China Eats the World,” the bank indicated that they had always had a positive outlook on Chinese companies but were uncertain about the catalyst for a global investment rush until now. The report was authored by research analyst Peter Milliken, who suggested that the bull market for stocks in Hong Kong and China began in 2024 and is expected to surpass previous highs in the medium term.

According to Deutsche Bank, China's presence in high-value industries is expanding at an unprecedented rate. As leading companies gain market share across various sectors, China is unlikely to remain only a small part of global market capitalization for much longer.

The rapid rise of DeepSeek has led to a surge in Chinese technology stocks, while simultaneously causing a downturn for firms listed on the Nasdaq. The Hang Seng Tech Index, driven by major companies such as Tencent, Alibaba, and Xiaomi, approached a four-month high, rising over 10% in the last two weeks. Additionally, the broader Hang Seng Index increased by about 6%. It is worth noting that shares of DeepSeek, founded in 2023 by Liang Wenfeng in Hangzhou, are not publicly traded.

AI, China, Investing