Artificial intelligence investments are driving unprecedented gains for Chinese technology companies, with Alibaba soaring more than 120 per cent this year whilst America’s Nvidia managed about 40 per cent growth over the same period.
The rally reflects shifting investor confidence in China’s AI capabilities, reports The New York Times. Semiconductor Manufacturing International Corporation has climbed around 180 per cent, whilst Baidu, Tencent and Xiaomi have each gained approximately 60 per cent.
The surge follows Chinese start-up DeepSeek’s January announcement claiming it created a powerful A.I. model that was significantly cheaper to build than offerings from better-funded American rivals. Since then, major Chinese technology firms including ByteDance, Alibaba, Tencent and Huawei have poured money into infrastructure like data centres.
Eric Wong, the founder of Stillpoint Investments, a hedge fund, noted that changing government expectations have shifted investor sentiment toward growth sectors. “That has enabled people to be more comfortable to put money into parts of the economy where they think there is outsized growth,” he said.
The MSCI China Index has gained more than 40 per cent this year, substantially outpacing similar US stock indices which have risen about 15 per cent. Technology companies now dominate the Chinese benchmark, with Tencent, Alibaba and Xiaomi comprising about 30 per cent of its total value.
In July, Nvidia announced that the US government would allow it to resume sales of a China-specific chip. But Chinese regulators have doubled down on a directive for companies building data centres to buy domestic chips instead.
“China has strong national policy support, vast data resources, sufficient power supply, leading manufacturing capabilities, diverse A.I. application scenarios and a fiercely competitive private sector,” said Winnie Wu, chief China equity strategist at BofA Global Research, a unit of Bank of America.
The momentum is attracting Chinese technology companies toward public listings. Last week, the Shanghai Stock Exchange approved the listing of Moore Threads, a Chinese semiconductor company. Unitree Robotics, a start-up based in the tech hub of Hangzhou, said last month that it would pursue a listing by the end of the year.
