Ignoring the overseas "AI panic," the Chinese market is wildly speculating on AI winners

As the U.S. market falls into "AI panic trading," with investors selling off software companies and wealth management firms, Chinese investors are aggressively buying into artificial intelligence concept stocks. This starkly different market sentiment reflects a fundamental divergence between investors in the two regions regarding AI technology: the U.S. is concerned about the disruption of existing business models, while China focuses on growth opportunities and cost reduction potential. Domestic companies that released new models or upgraded existing products this month have become favorites among investors. MiniMax and KNOWLEDGE ATLAS are the most typical examples, with both companies' stock prices doubling in February. Bullish ratings from Wall Street investment banks like Morgan Stanley further fueled market enthusiasm, as pure AI concept stocks are grabbing funds from traditional internet giants. Behind this market divergence is a difference in investment logic. Charu Chanana, Chief Investment Strategist at Saxo Markets, stated, "The Chinese market is still focused on what AI can help with, rather than what it will take away from existing companies. U.S. investors are anxious about the competitive threat to lucrative profit pools, while China remains focused on market penetration." Newly Listed AI Stocks Lead the Charge MiniMax and KNOWLEDGE ATLAS have gained favor among investors, partly due to the scarcity of publicly listed companies building large models globally. Both companies went public in Hong Kong in January, with KNOWLEDGE ATLAS's stock price soaring 524% at one point, and MiniMax rising 488%. In contrast, industry pioneers OpenAI and Anthropic have yet to go public. Other recently listed Chinese AI-related stocks have also performed strongly. Chip designer Biren Technology has seen its stock price rise over 80% since its listing on January 2, while Lattice Technology has surged over 98% since its debut on February 9. Domestic companies are also benefiting from the halo effect, as private financing rounds for two U.S. firms show valuations continuing to climb. OpenAI is nearing a funding round of over $10 billion at a valuation exceeding $850 billion, while Anthropic raised $3 billion at a valuation of $380 billion in early February. Technological Breakthroughs Boost Valuations The release of new models and financing data have driven valuation reassessments. Jefferies analyst Edison Lee and others wrote in a research report on February 13, "There is upside potential for Chinese AI valuations." The latest large language model GLM-5 released by KNOWLEDGE ATLAS recently surpassed the competing product launched by Moonshot AI on the benchmarking site Artificial Analysis, becoming the top global open-source model. According to the Jefferies report, this is the highest ranking ever achieved by a Chinese AI lab. Some of the market enthusiasm is related to DeepSeek, as the market expects DeepSeek to soon release its next-generation model, which could boost the entire sector. The market also anticipates that the cost competitiveness of Chinese AI models like DeepSeek may accelerate user adoption Currently, domestic investors view every new advancement in AI as a catalyst, benefiting not only developers but also users of new tools. ByteDance recently launched a video production application, triggering a collective rise in film and media stocks. Gary Tan, portfolio manager at Allspring Global Investments, stated: "The divergence between Chinese market participants and global investors reflects the structural uniqueness of China's AI landscape." However, some market observers warn that if profit growth cannot keep pace with investor optimism, valuation re-evaluations may be difficult to sustain