Investing.com-- Chinese and Hong Kong technology stocks surged on Monday, driven by heightened enthusiasm surrounding domestic artificial intelligence (AI) advancements, particularly the recent breakthrough by AI startup DeepSeek.
The company’s R1 AI model- released in late-January shot up in popularity as it appeared to match the capabilities of rivals such as ChatGPT while using older hardware and a fraction of its budget.
Hong Kong-listed Baidu (NASDAQ:BIDU) Inc (HK:9888) shares jumped 3.5%, while Xiaomi (OTC:XIACF) Corp (HK:1810) shares climbed 3.2% after reaching an all-time high in the previous session.
Alibaba (NYSE:BABA) Group (HK:9988) stock surged 6%. The e-commerce giant has also released its AI model Qwen2.5-Max, to rival leading players in the sector.
JD (NASDAQ:JD).com (HK:9618) shares rose 2.4%, while NetEase Inc (HK:9999) gained 2%, reflecting its ongoing efforts to incorporate AI into gaming and educational platforms.
U.S.-listed PDD Holdings Inc (NASDAQ:PDD) closed 1.4% on Friday.
Tencent Holdings Ltd (HK:0700) stock rose 2.3%.
DeepSeek’s recent AI breakthrough has been a significant catalyst for this surge. The company’s open-source large language model has been rapidly adopted across various industries, including automotive and telecommunications.
Great Wall Motor Co Ltd (HK:2333), for instance, has integrated DeepSeek’s AI into its "Coffee Intelligence" vehicle system, while major telecom providers are collaborating with DeepSeek’s open-source model to enhance their services.
DeepSeek spurred increased confidence in China’s AI capabilities, as offerings from the country appeared to be competitive despite recent U.S. controls on the export of advanced AI technology to China.
This spurred an extended bull rush into local technology stocks, which were trading at significant discounts after an extended rout over the past three years.