HONG KONG/NEW YORK, Dec 23 (Reuters) – Global investors are increasing their bets on Chinese artificial intelligence companies, betting on the next DeepSeek and seeking to diversify, as Wall Street worries grow about a speculative bubble in the industry.
Beijing’s push for technological independence has also fueled demand for Chinese AI companies. Chinese chipmakers have been quick to go public, especially Moore Threads (688795.SS) and MetaX (688802.SS), known as the “Nvidia of China,” both of which went public this month.
As Beijing steps up support for artificial intelligence chipmakers, foreigners believe China is closing the technology gap with the United States, spurring bets on Chinese companies and growing concerns that U.S.-listed artificial intelligence stocks are overvalued.
For example, U.K.-based asset management firm Rufer said it has “deliberately limited investments in the Big Seven” of U.S. technology giants and hopes to increase its position in Alibaba (BABA, 9988.HK) to expand investment in China’s artificial intelligence theme.
“While the U.S. remains the leader in cutting-edge artificial intelligence, China is rapidly closing the gap,” said Gemma Cairns-Smith, investment expert at Ruffer. “The moat may not be as wide or as deep as many think… The competitive landscape is changing.”
Rufer is approaching the topic of artificial intelligence through Chinese tech giants such as Alibaba, which runs an artificial intelligence chip unit, owns the large language model Qwen and is pouring money into cloud infrastructure.
Global asset managers are increasingly eyeing Chinese artificial intelligence companies as part of a wave of startups listed in mainland China and Hong Kong, seeking to capture growing investor interest following the meteoric rise of DeepSeek, China’s version of ChatGPT.
Tech war stimulates demand
UBS Global Wealth Management rated Chinese tech “most attractive” in a report this month, citing investors seeking geographic diversification and China’s “strong policy support, technological self-reliance and rapid artificial intelligence monetization.”
The tech-heavy Nasdaq (^IXIC) currently trades at 31 times earnings, compared with 24 times for Hong Kong’s Hang Seng Technology (HSTECH.HK), which has made AI bets through stocks such as Alibaba (BABA, 9988.HK), Baidu (BIDU, 9888.HK), Tencent (0700.HK, TCEHY) and chip foundry Semiconductor Manufacturing International Corporation (0981.HK).
Riding on the momentum, U.S. investment adviser Rayliant helped launch a Nasdaq-listed fund in September, allowing investors to invest in “Chinese versions of stocks such as Google, Meta, Tesla, Apple and OpenAI.”
Brendan Ahern, chief investment officer at KraneShares, said the rapid rise of Chinese artificial intelligence chip manufacturers such as Cambrian illustrates the scale and speed of innovation in China’s artificial intelligence and semiconductor industries.