What is DeepSeek and why is it important for Chinese tech stocks?

DeepSeek is an artificial intelligence model developed in China that gained significant attention in January 2025. Its breakthrough capabilities sparked investor enthusiasm because it demonstrated China's potential to develop advanced AI technology that's both cost-effective and nimble. This development is important for Chinese tech stocks because it signals these companies could become major players in the global AI race, potentially following the success path of US tech giants.

What risks should I consider when investing in Chinese AI stocks?

When investing in Chinese AI stocks, consider the rising US-China tensions over technology dominance as a significant risk factor. These geopolitical issues could impact business operations, partnerships, and market access. Additionally, regulatory changes in China's tech sector could affect growth trajectories. While these companies show promising AI developments, they're still in the early stages of AI integration compared to some US counterparts, which might mean longer timeframes for returns on AI investments.

How are Chinese tech companies approaching AI differently?

Chinese tech companies are increasingly favoring collaboration over solely developing in-house AI solutions. For example, Tencent is integrating DeepSeek's AI into Weixin rather than relying exclusively on proprietary technology. Their approach focuses on developing more cost-effective and adaptable AI models that can be implemented quickly across their vast user bases. This strategy of partnership and practical implementation might allow them to advance rapidly in specific AI applications despite starting behind in the global AI race.

4 handpicked stocks

China AI

Q: Why are global investors suddenly interested in Chinese tech companies?

Global investors are showing renewed interest in Chinese tech companies largely due to their AI potential. After DeepSeek's breakthrough, these once-overlooked companies are now viewed as possible AI champions in the world's second-largest economy. Investors hope these firms can replicate the tremendous growth and returns seen in US tech companies like Nvidia, Meta, and Microsoft, all while potentially offering more cost-effective AI solutions.

Once overlooked, Chinese tech giants are now the new darlings of global investors. This collection features companies positioned to become AI champions in the world's second-largest economy, carefully selected by our expert analysts.

Han Tan | Market Analyst

Updated 2 days ago | Published at May 5