The Hang Seng Tech Index, which tracks the 30 largest technology companies listed in the city, rose as much as 2.9% on Friday, reflecting a rise of more than 20% from its January low.

China’s growing clout in the artificial intelligence space has sparked a wave of optimism toward the nation’s tech shares, with a gauge approaching a technical bull market and brokers issuing upbeat calls.

Lower construction spending on data centers because of DeepSeek could negatively impact heavy equipment stocks like Caterpillar, JPMorgan said.

Chinese investors are rushing into AI-related stocks, betting the artificial intelligence advance of home-grown startup DeepSeek will lead to a boom in the sector and give the initiative to China in an intensifying Sino-U.

DeepSeek released an open-source artificial intelligence model in December, saying it took only two months and less than $6 million to create it.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

Global chip stocks slumped Monday on DeepSeek revealing it had developed AI models that nearly matched American rivals despite using inferior chips.

Silicon Valley and Washington leaders said the app shows China can challenge the U.S. The Nasdaq lost 3 percent and chipmaker Nvidia shed $589 billion in market capitalization.

Chinese technology stocks trading in Hong Kong appear poised to enter a bull market after AI models released by DeepSeek sparked renewed interest in China’s technology firms. Xiaomi’s Hong Kong stock was up 5.

The Hang Seng Tech Index gained 2.5% on Friday, with a total increase of more than 20% since January. It appears that DeepSeek’s hype has erased concerns of trade wars among Chinese investors, due to which China’s tech stocks in Hong Kong continue to surge.