Stock market money in China is continuing to concentrate in the AI supply chain, including semiconductors, software and cloud, even as the broader economy slows. Investors are focusing on companies aligned with Beijing’s push for technological self-reliance, and performance gaps between mainland and Hong Kong markets reflect listing structures. Selective bets are also emerging among hardware and AI model companies. Price competition, highlighted by DeepSeek’s discounts and low API costs, is another key driver.

The launch of DeepSeek’s latest AI model, V4, is expected to spur a broad revaluation of China’s AI industry, with analysts citing potential gains in demand for Chinese high-performance chips and wider commercial adoption. Chip designers and foundries are seen as beneficiaries, while securities firms project rapid growth in China’s AI chip market. Morgan Stanley also flagged lower inference costs and possible Hong Kong index inclusion for AI model firms.