In recent weeks, a remarkable surge in the popularity of DeepSeek has set the tech world abuzz, emerging as one of the fastest applications to hit 30 million daily active usersThis explosive growth has caught the attention of smartphone manufacturers, all eager to integrate DeepSeek into their devicesConcurrently, the financial markets are responding with fervor as DeepSeek's introduction has sparked a wave of speculation, driving up shares of affiliated companies.
On February 14, prior to the lunch bell, major Chinese stock indices revealed positive trends: the Shanghai Composite climbed 0.25%, while the Shenzhen Composite rose by 1.1%, and the ChiNext index, associated with technology stocks, soared by 1.92%. As investor excitement swelled, stocks linked to the DeepSeek phenomenon, such as Huayang Lianzhong and Mengwang Technology, were reported to have hit their daily trading limits.
01 Telecom Operators and Device Manufacturers Rush to Utilize DeepSeek
Reports indicate that three major telecommunications companies in China have fully integrated the domestically-developed open-source model, DeepSeek, into their infrastructure.
Among them, Tianyi Cloud, a subsidiary of China Telecom, has become the first cloud platform in the country to apply DeepSeek's localized inference technology at an operational scaleMeanwhile, China Mobile has tailored its cloud services specifically to support the popular DeepSeek-R1 model, providing cost-effective computing resources for Internet firms and academic research
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Notably, China Unicom's cloud platform offers a programming assistant capable of generating multiple lines of code from a single Chinese command, providing not just generation but also detailed explanations and optimizations of the code produced.
In addition to the cloud platforms established by telecommunications operators, manufacturers of mobile devices and PCs have actively embraced DeepSeek’s capabilities.
Baichen, an AI expert from Honor, remarked that since integrating DeepSeek, there has been an average accuracy improvement of 15% in AI responsesIn specific scenarios, this enhancement can reach as high as an 85% accuracy boost.
Local governments have also begun deploying DeepSeek in their administrative systemsExperts note that the open-source nature of DeepSeek significantly lowers the barriers for AI adoption across various sectors, with expectations for exponential growth in government and enterprise applications.
Wei Dong, general manager of Lenovo Baiying, shared that they have partnered deeply with DeepSeek to develop an integrated machine that leverages the technologyDiscussions have ensued with various sectors, including government, manufacturing, healthcare, and education, all seeking to facilitate localized deployments.
In fact, the Longgang District’s Bureau of Government Services and Data Management in Shenzhen has successfully deployed the DeepSeek-R1 model onto the government extranet, marking Guangdong's first instance of this model's implementation within a government settingCurrently, the capabilities of the DeepSeek model are accessible to various departments within the Longgang District.
The soaring popularity of DeepSeek can be attributed primarily to its innovative algorithms and impressive cost-effectiveness
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Industry insiders point out that DeepSeek’s significant advantage lies in its affordability; described as a super-intelligent "brain," it is not only smart but also economical in practical use.
02 DeepSeek Ignites Bullish Sentiments in A-shares
The emergence of DeepSeek is prompting global investors to reassess the investability of Chinese assetsRecently, several Wall Street firms have projected that the positive momentum in Chinese stocks will continue, fueled by DeepSeek’s innovation.
"DeepSeek isn’t just a remarkable tech event; it could also signal an important macro event," said Kuang Zheng, Chief Investment Officer of HSBC Global Private Banking and Wealth Management in ChinaHe highlighted that DeepSeek is drawing attention to the increasing competitive edge of Chinese technological innovation on the global stage.
Bank of America has likened the arrival of DeepSeek to Alibaba's IPO back in 2014, suggesting it could mark a turning point for the Chinese stock marketJust as Alibaba's public offering attracted substantial long-term capital into the Chinese market and bolstered the growth of the new economy, DeepSeek's technological breakthroughs might similarly attract more global capital toward China's AI sector, enhancing the stock market's long-term prospects.
Indeed, DeepSeek is igniting bullish sentiments in the A-share marketAccording to a report from Goldman Sachs, global hedge funds have been actively purchasing Chinese stocks since the start of this year
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As of February 7, onshore and offshore Chinese stocks collectively ranked as the "highest net purchases" in Goldman Sachs’ global proprietary brokerage businessThe buying spree from hedge funds between February 3 and February 7 was the strongest seen in over four months.
Reports suggest that DeepSeek’s groundbreaking low-cost AI model has become a catalyst for global investors to reevaluate Chinese assetsMany investors perceive that valuations in the US stock market are peaking, while analysts and investors believe that China's current macro policies are steadfastly supporting market sentimentThe MSCI China Index has risen for four consecutive weeks since mid-January, with gains exceeding 6% in February, outperforming major global markets.
Fields such as AI applications, domestic computing power, and humanoid robotics are rapidly becoming focal points for investor attentionKuang Zheng anticipates that these AI-related sectors, buoyed by DeepSeek, are likely to emerge as hot topics in the Chinese stock market in the first quarter of 2025.
03 Caution Against "Hype Riding"
Industry experts warn that while the excitement surrounding DeepSeek has extended to capital markets, there is a need to be vigilant regarding "hype riding" behavior that often accompanies such bullish phenomena.
Historically, there have been numerous instances where investors or companies chasing trends ended up with disappointing resultsPrevious hyped concepts surrounding internet finance, unicorns, and platforms like TikTok saw similar patterns of "disillusionment," where companies sought related trends but failed to deliver, resulting in financial losses for investors who acted rashly.
From the investor's standpoint, experts believe it is reasonable to make investment decisions based on assessments of the actual relevance of a listed company's connection to DeepSeek
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