The advent of DeepSeek has significantly reshaped the landscape of the stock market in both Hong Kong and mainland China, particularly in the technology sectorInvestors have begun to notice the potential of artificial intelligence (AI) applications, spurred on by DeepSeek’s impressive reasoning capabilities, low computational cost, and open-source natureLike a breath of fresh air, the optimism surrounding DeepSeek marks the emergence of a new phase of growth within the AI market, with investors rallying around the vast opportunities it presents.

It’s often said that money is the smartest entity in any market; thus, it’s hardly surprising that investors in the A-share market have quickly jumped inIn recent months, the impact of DeepSeek has reverberated through sectors in the United States, known for its advanced AI industry

The U.S. capital market is dominated by what is often referred to as the "Magnificent Seven" tech giants, leveraging AI to attract immense capital investmentsObservably, the potential valuation boost DeepSeek could bring to the Chinese market cannot be underestimated, especially given the notable valuation gaps that exist between Chinese and American tech stocks.

Yet, when we examine the A-share market, it becomes evident that there are few companies that genuinely embody the essence of AI or innovative technologyInstead, many firms are embroiled in sectors adjacent to AI or those that are poised to future applications of the technologyEven though AI concepts have been sporadically brought into the limelight for speculation in the recent past, many of these so-called 'AI stocks' fundamentally consist of hardware companies that are only anticipated to implement AI solutions in the long run

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The presence of insurmountable bottlenecks in reasoning mechanisms means that some advanced models may not yield practical applications yet, rendering them speculative assets on the A-share market.

However, there remains a palpable awareness in the market that once AI applications genuinely take form, these companies could quickly become direct beneficiaries of the AI industryIf products like DeepSeek can deliver on their promises of low cost and high performance, they could break through the existing bottlenecks that currently stifle the transfer from large models to practical applicationsSuch a breakthrough could catalyze substantial progress in the AI application sector within China, prompting investors to reassess the technological potential of Chinese firms in this arena, leading to a potential revaluation of Chinese tech stocks.

This revaluation of expectations is already igniting discussions regarding investment logic in the market

Consequently, technology and intelligent driving stocks in both the Hong Kong and A-share markets have begun to attract significant capital inflows.

In the United States, the majority of resources and investments are directed toward AI development itself and foundational AI infrastructureThis focus has resulted in a time lag before these innovations can be commercialized on a large scaleWhile the growth of AI technology is rapid, the market for its applications seems sluggish, highlighting a disparity between the pace of AI advancement and its practical market viability.

Conversely, the emergence of DeepSeek within the Chinese market appears to be rapidly igniting momentum for application developmentIt seems as though confidence in AI infrastructure has been rejuvenated overnightMajor domestic cloud service providers such as China Unicom Cloud, JD Cloud, Alibaba Cloud, Tencent Cloud, Baidu Intelligent Cloud, and China Mobile Cloud have begun rolling out DeepSeek's large model since February 5, integrating it into their respective model repositories

Hardware giants like Huawei, Xiaomi, and Inspur have also begun incorporating DeepSeek into their troubleshooting and development pipelinesAdditionally, numerous intelligent computing centers under construction have paused their projects to reassess how they can integrate DeepSeek into their frameworks.

The transition from DeepSeek's introduction to its broad application deployment, followed by a renewed recognition of the technological potential of Chinese enterprises by investors, creates a dazzling chain of developmentsSome have gone so far as to celebrate DeepSeek as an emblem of national fortune.

Yet, it is crucial to approach the unfolding narrative with a level-headed perspectiveWhile AI is indeed advancing at an extraordinary rate, it is essential to remember that it has only been around two years since the launch of ChatGPT, indicating that genuine maturity in the technology will still take time

Although DeepSeek has charted a promising technological path, contributing immense value to the industry, the competition within the AI sector remains in its nascent stages; it is far from being a defined race.

When considering DeepSeek and today’s AI landscape in China, we must resist both the temptation to over-mythologize its achievements and the inclination to undervalue its impactPublic perception should avoid elevating this innovation to the status of a national destiny, as the narrative surrounding success and failure must acknowledge the experimental nature of technological innovationMany Chinese companies tend to follow established trends; however, DeepSeek illustrates that China is not lacking in capital but rather needs more confidence and a strategic approach to harness high-density talent for effective innovationIn this light, creating high-quality environments and frameworks that allow for flexible experimentation and innovation is key