Chinese tech giants are outperforming U.S. rivals, driven by AI advancements from DeepSeek. This startup has boosted China’s "7 Titans," whose market value grew by $439 billion, while U.S. "Magnificent Seven" stocks fell 10% in 2025. DeepSeek’s innovative, cost-efficient AI models and China’s government support have fueled this rally. With rebounding profits and AI-driven growth, China’s tech sector is advancing rapidly, signaling a global shift in the technology landscape.
Chinese technology giants are rapidly outpacing their U.S. counterparts, buoyed by significant advancements in artificial intelligence led by DeepSeek. This innovative AI startup has revitalized confidence in China's tech landscape, driving substantial investments into the nation's leading technology firms. Dubbed the "7 Titans" by Societe Generale SA, a portfolio of China's top seven tech companies has surged over 40% in 2025. The combined market value of these firms—Alibaba Group Holding, Tencent Holdings, Xiaomi, BYD Co, Semiconductor Manufacturing International Corp, JD.com Inc, and NetEase Inc—has expanded by an impressive $439 billion.
In contrast, the U.S. "Magnificent Seven" stocks—comprising Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla—have faced a rough patch, declining by about 10% since the year's start. This slump has nearly pushed the Nasdaq 100 Index into correction territory, with recent weeks amplifying the decline due to DeepSeek's ripple effects on U.S. markets.
DeepSeek’s Innovative Role in AI
Unlike top U.S. AI startups, which are heavily funded by tech giants like Microsoft and Amazon, DeepSeek stands out as an independent force. The company, founded in 2023 by Liang and his cofounders, operates without external investors outside its founding team. According to Chinese corporate filings, Liang holds an 84% stake in the Hangzhou-based enterprise, having launched it with capital from High-Flyer Capital Management, a hedge fund he co-established in 2015.
Although DeepSeek generates limited revenue, analysts estimate its valuation exceeds $1 billion. The company’s only revenue-generating product to date is developer access to its models, offered at significantly lower costs compared to OpenAI. DeepSeek’s unique position and cost-efficient approach have made it a game-changer in the AI landscape.
What’s Driving China’s Tech Stock Rally?
At the start of the year, U.S. stocks were at record highs, while Chinese equities faced challenges due to regulatory hurdles and a sluggish consumer recovery. However, the emergence of DeepSeek has shifted market sentiment, revealing that China’s AI sector is advancing faster than investors anticipated.
Multiple factors underpin the robust performance of Chinese tech stocks. Vey-Sern Ling, managing director at Union Bancaire Privee, explained to Bloomberg: "The ingredients for China tech to shine are in place: Robust government backing, rebounding profits, and AI as a long-term growth engine." He also noted that while U.S. tech stocks have experienced significant valuation increases over the past two years, they are now grappling with disappointing earnings and economic pressures. This has prompted investors to redirect their focus toward Europe and China.
Government Support and AI Innovation Fuel Growth
China’s technology sector has gained additional momentum following Beijing’s recent announcement of new support measures and groundbreaking AI developments from firms like Alibaba. According to Bloomberg, the Hang Seng China Enterprises Index—which features most of Societe Generale’s "7 Titans"—jumped over 6% this week, reaching its highest level since late 2021.
Despite this remarkable growth, analysts at Societe Generale, led by Frank Benzimra, argue that China’s "7 Titans" remain attractively priced. Their February 28 report highlights that the group is trading at just 18 times forward earnings, making them over 40% cheaper than their U.S. "Magnificent Seven" counterparts.
As Chinese tech giants continue to capitalize on AI advancements and government support, their rising dominance signals a major shift in the global technology landscape. China's "7 Titans" appear well-positioned to maintain their upward trajectory, fueled by innovation and strategic backing.
コメント