(Bloomberg) – Tencent Holdings Ltd.’s shares rose to its highest since 2021 after Deepseek, an AI service that has rocked the industry since its launch this year.
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Tencent, based in Shenzhen, is currently integrating Deepseek’s artificial intelligence models into WeChat search, the company said in a statement. The Internet and gaming giants join a wave of government agencies and service providers adopting Deepseek’s software across China. The move has helped to boost confidence in Tencent’s outlook, following a strong game release that has helped stocks rise more than 70% over the past year.
Baidu Inc., Tencent’s rival Baidu Inc., is building Deepseek on its search product, but fell 8.8% in the afternoon as it made profits ahead of Tuesday’s revenue report.
The Tencent rally was energized by a meeting between President Xi Jinping and e-commerce icon Jack Ma on Monday, with investors actively piling up on Chinese technology. The show of support for the private sector coincides with a recent surge in Hong Kong stocks due to increased capabilities in AI.
“Wide range of AI adoption could increase China’s EP by 2.5% per year over the next decade,” analysts at Goldman Sachs, including Kinger Lau, wrote in a memo. “As much as AI could potentially promising China’s growth trajectory, strong policy stimuli are still needed to address deep macro challenges and promote the benefits of sustainable equity. I think there is.”
Deepseek’s release of R1 Reasoning Chatbot on January 20th has proven to be transformative for the global stock market, with US list investing heavily in the most powerful hardware for AI development , slashing value from companies by more than a trillion dollars. Also, while China has promoted a $1.3 trillion rally as investors bet on future progress, the rise has not been uniform.
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