Since its debut this year, shares of Tencent Holdings LTD rose to their highest level since 2021 after DeepSeek, an industry-shaking artificial intelligence service, made its debut on the big tech firm’s wechat social media platform.
Shenzhen-based Tencent said in a statement that it is currently integrating DeepSeek’s artificial intelligence model into wechat search. The Internet and gaming giant joins a wave of government agencies and service providers across China that have adopted DeepSeek’s software. The move helped boost confidence in Tencent’s prospects after a year of strong game launches that saw its shares rise more than 70 percent over the past year.
The expected support for the private sector coincides with a recent surge in the Hong Kong stock market driven by increased AI capabilities.
Premier Li Qiang also attended the meeting.
Goldman Sachs analyst Kinger Lau wrote in a note that “widespread adoption of AI could add 2.5% per share to China’s earnings over the next decade.” “While AI can be of great benefit to China’s growth trajectory, we believe strong policy stimulus is still needed to address deep-rooted macro challenges and drive sustainable equity returns.”
(Hang Seng Tech Index hits highest since 2022)
DeepSeek announced its R1 reasoning chatbot on January 20, and the news had a major impact on global stock markets, causing more than a trillion dollars to be wiped off the market value of US-listed companies heavily invested in the most powerful AI hardware. The news also pushed Chinese stocks up $1.3tn, albeit unevenly, as investors bet on more progress to come. Baidu Inc., which also incorporates DeepSeek into its search product, fell more than 5% in Hong Kong on Monday.
“The emergence of DeepSeek-R1, coupled with the recent launch of other Chinese AI models seen as globally competitive and cost-effective, has changed the narrative of Chinese technology, reassessed investor optimism about AI growth and economic benefits, and helped spark” the stock market rally, Goldman wrote.
