Recently, a notable surge in interest and market dynamics has been triggered by a Chinese large AI model known as DeepSeekThis significant advancement has not only reverberated across global markets but has also prompted major technology companies such as NVIDIA and Microsoft to experience major fluctuations in their stock valuesExperts within the industry suggest that the launch of DeepSeek has catalyzed a renewed reassessment of the value of Chinese assets, especially in the tech sectorAs a result, leading Chinese tech stocks are gearing up for steady inflows of foreign investment, as evidenced by recent adjustments made in the asset allocations of multiple Qualified Domestic Institutional Investor (QDII) fundsThese investments have seen a notable shift towards Chinese equities, all the while scaling back their holdings in US stocks.
According to data released by Choice, the period between January 27 and February 5 saw considerable volatility in the share prices of several US tech stocks, with NVIDIA and Microsoft reporting declines of 12.47% and 6.93%, respectivelyThese dramatic swings underscore a broader trend among investors re-evaluating international exposure in light of developments in the world's second-largest economy.
Financial analysts from Caixin Securities have commented that DeepSeek-R1, a new iteration of the model, offers exceptionally low training costs and utilizes an open-source strategy, positioning it closely alongside OpenAI's offeringsThis development has significantly narrowed the previously observed gap between Chinese and US capabilities in artificial intelligence sectorsDuring the recent Lunar New Year holiday, a period traditionally characterized by market sluggishness, there was an evident shift where global capital began to reassess the RI implications of DeepSeek on the future trajectory of the AI industry, particularly in light of a retreat in markets in Europe, Japan, and the United StatesChinese tech stocks, however, have displayed resilience and strength amid these trends, pointing towards a potentially promising performance in the near future.
Take, for instance, the Huabao Overseas New Energy Vehicle Stock Initiated A FundBy the end of last year, data from Choice indicated a dramatic shift in its asset composition; the proportion of foreign stocks held by this fund fell to 65.85%, a stark contrast to 94.4% at the end of the third quarter, representing a 28.55-percentage point reductionConversely, its allocation to Hong Kong stocks has surged to 18.41%, up from a mere 0.28% three months prior.
Similarly, the Chuangjin Hexin Global Chip Industry Stock Initiated A Fund increased its investment in Chinese equities during the fourth quarter of last year
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As of the end of that quarter, the fund's American stock allocation had dropped to 19.3%, down 19.5 percentage points from 38.8% at the end of the previous quarter, while its A-share holding saw a slight increase to 29.3%.
The GF Global Technology Three-Month Open Hybrid Fund also adjusted its portfolio in the fourth quarterIt reported a decline in US stock holdings to 52.93% from 53.89% three months priorFurthermore, by the end of the fourth quarter, a remarkable trend emerged: among the top ten holdings of this globally diversified QDII fund were seven stocks from Chinese companies including Midea Group, Trip.com, Pinduoduo, Futu Holdings, Meituan, Ke Holdings, and Alibaba.
The fund manager, Li Yaozhu, emphasized in the fund's quarterly report that Chinese firms are consistently breaking new ground in AI technology, with improvements in reasoning capabilities ongoingInnovations such as DeepSeek's low-cost, high-quality large models can now rival those produced by established tech giants and examples like the machine dog from Yushu Tech have garnered significant attention and praise onlineThese developments highlight the continuous evolution of Chinese firms in the tech sector.
Li Yaozhu elaborated further, stating, “We believe that during this phase of AI transformations, the importance of data is rising rapidlyInternet companies harness vast amounts of data, and with the empowerment of AI tools, this data will unveil deeper valueTherefore, we view internet companies as worthy of substantial allocation in our portfolios.”
From the perspective of Morgan Stanley’s fund management team, they contend that throughout the last year, Chinese tech companies have markedly narrowed the gap with foreign AI behemoths, with certain large models now standing on par with their international counterpartsThe rapid iteration of AI technology and the persistent decline in associated costs have laid a robust foundation for real-world AI applications, marking a turning point where AI models are increasingly integrated into end products
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