The launch of DeepSeek has unsettled the world’s belief that it “could contain China”, said Deutsche Bank, calling the emergence of the artificial-intelligence (AI) technology the country’s “Sputnik moment”.
By characterising the start-up’s achievement as a significant turning point for the country, the bank goes further than Marc Andreessen, the influential Silicon Valley venture capitalist, who referred to DeepSeek as a Sputnik moment for the AI sector. The comments refer to Soviet Union’s launch of the world’s first artificial satellite in 1957, which instantly changed perceptions of that country.
“We think 2025 is the year the investing world realises China is outcompeting the rest of the world,” Deutsche Bank said on Wednesday in a report titled “China Eats the World”, seen by the Post.
The bank was already bullish on Chinese companies, but had been uncertain about what would trigger a global rush into them until now, it said. “We believe the bull market for [Hong Kong and China] equities began in 2024, and will exceed prior highs in the medium term,” said the report, authored by Peter Milliken, Hong Kong-based head of Asia-Pacific company research with the bank.
China’s dominance in high-value industries was expanding at an unprecedented pace, according to the bank. With world-leading companies gaining market share across industries, China was unlikely to remain a single-digit percentage of global market capitalisation for long.
DeepSeek’s overnight fame has led to a rally in Chinese technology stocks, while triggering a sell-off in Nasdaq-listed firms. The Hang Seng Tech Index, led by major companies such as Tencent Holdings, Alibaba Group Holding, and Xiaomi, approached a four-month high on Thursday after surging more than 10 per cent in the past two weeks. The broader Hang Seng Index also rose about 6 per cent. Shares of DeepSeek, founded in the Zhejiang provincial capital of Hangzhou by Liang Wenfeng in 2023, are not publicly traded.
