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China’s chip stocks soar after “real DeepSeek moment”

Chinese markets at 10-year highs

“China's stock market is on a tear supported by state money and big institutions,” and the “benchmark Shanghai Composite Index is up by a quarter since April and at 10-year highs,” reported Reuters, although this is “stark contrast to China's economy which remains mired in a property crisis, weak consumption and a deflationary spiral.”

AI chip stocks soar

Another factor boosting share prices is what investor and tech analyst Kevin Xu called “the real DeepSeek moment.” This refers to a statement from Chinese AI firm DeepSeek that its new model is “designed for the next generation of domestically produced chips to be released soon.” Semiconductor and “computing power stocks surged across the board,” reported Phoenix News, adding that “the market reaction wasn't simply hype, but rather a recognition of the potential for domestic chips to truly reach the forefront of the global computing power market.”

As Chinese investors piled into domestic chip stocks, U.S. Representative Raja Krishnamoorthi introduced the No Advanced Chips for the CCP Act of 2025 to Congress, and his colleague John Moolenaar wrote a letter to Secretary of Commerce Howard Lutnick begging him to implement an “export control policy must aim to maintain an overwhelming and ever-widening gap in AI compute between China and the U.S.”

China’s still got a long way to go to catch up to leading global semiconductor technology, but the direction is clear, and it makes U.S. attempts to cut China off from advanced tech seem increasingly futile. Beijing is also leaning into AI: The State Council this week “set targets for the adoption of AI-powered devices across various industries—aiming for over 70% by 2027 and over 90% by 2030.”

Related:

• China’s chipmakers are seeking to triple the country’s total output of artificial intelligence processors next year / Financial Times

• Chinese AI chipmaker Cambricon posts record profit as Beijing pushes pivot from Nvidia / Financial Times

• Meet Cambricon: How 2 ‘genius brothers’ created China’s potential rival to Nvidia / SCMP

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