Many investors are worried about DeepSeek's latest breakthrough. Its Chinese developers claim to have trained a generative AI model that's on a par with many of the U.S. versions for under $6 million.

Some AI researchers hailed DeepSeek’s R1 as a breakthrough on the same level as DeepMind’s AlphaZero, a 2017 model that became superhuman at the board games Chess and Go by purely playing against itself and improving, rather than observing any human games.

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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.

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.

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

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.