Ignoring overseas "AI panic," the Chinese market is fervently speculating on AI winners.
As the U.S. market falls into "AI panic trading," with investors selling off software companies and wealth management institutions, Chinese investors are aggressively chasing AI concept stocks. This stark contrast in market sentiment reflects fundamental differences between investors in the two regions regarding AI technology: the U.S. fears disruption to existing business models, while China focuses on growth opportunities and cost reduction potential.
Domestic companies that have released new models or upgraded existing products this month have become investors' favorites. MiniMax and Zhipu AI are the most typical examples, with both companies' stock prices doubling in February. Bullish ratings from Wall Street investment banks such as Morgan Stanley have further boosted market enthusiasm, with pure AI concept stocks siphoning funds away from traditional internet giants.
Behind this market divergence lies a difference in investment logic. Charu Chanana, Chief Investment Strategist at Saxo Markets, stated, “The Chinese market is still focused on what AI can help with, rather than what it might take away from existing businesses. U.S. investors are anxious about lucrative profit pools being threatened by competition, while China remains concerned with market penetration."
Newly Listed AI Stocks Lead Gains
MiniMax and Zhipu AI are favored by investors, partly because there are few listed companies globally building large models. Both companies were listed in Hong Kong in January, with Zhipu AI’s stock price surging as much as 524% and MiniMax climbing 488%. In contrast, industry pioneers OpenAI and Anthropic have yet to go public.
Other recently listed Chinese AI-related stocks have also performed strongly. Chip designer Biren Technology has risen over 80% since its listing on January 2, and Montage Technology has soared by more than 98% since being listed on February 9.
Domestic companies have also benefited from a halo effect; private financing rounds for two U.S. companies show that valuations continue to rise, with OpenAI reportedly raising over $100 billion at a valuation of more than $850 billion, and Anthropic raising $30 billion at a valuation of $380 billion in early February.
Technical Breakthroughs Boost Valuations
The launch of new models and fundraising data have driven a revaluation of companies. Jefferies analysts Edison Lee and others wrote in a report on February 13: "There is upside potential for China AI valuations."
Zhipu AI’s recently released latest large language model, GLM-5, has surpassed Moonshot AI's competing product launched several weeks ago on the benchmark site Artificial Analysis, becoming the world's top open-source model. According to Jefferies' report, this is the highest ranking ever achieved by a Chinese AI lab.
Some of the market enthusiasm is related to DeepSeek, which the market expects will soon release its next-generation model, likely lifting the entire sector. The market also anticipates that the cost competitiveness of DeepSeek and other Chinese AI models may accelerate user adoption.
Currently, domestic investors view every new AI development as a catalyst, which benefits not only developers but also users of new tools. ByteDance recently launched a video creation app, triggering a collective rise in film and media stocks.
Gary Tan, portfolio manager at Allspring Global Investments, stated: "The divergence between Chinese market participants and global investors reflects the structural uniqueness of the Chinese AI landscape." However, some market observers warn that if earnings growth does not keep pace with investor optimism, the revaluation may be difficult to sustain.
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