In today's rapidly evolving financial landscape, it is fascinating to see how global dynamics can shift in the blink of an eyeThe trading day following the Chinese New Year, a period traditionally characterized by cautious spending and subdued economic activity, took a surprising turnWhile worldwide capital markets faced significant downturns, certain segments, particularly the Hong Kong stock market, exhibited remarkable resilience, prominently showcasing the Deepseek conceptAmong the standout performers was Kingsoft Cloud (stock code: 03896), which saw its shares soar by more than 30%.

The surge in Kingsoft Cloud’s stock price can be traced back to the emergence of Deepseek, a sophisticated AI model developed in ChinaLaunched just before the festive season on January 20, 2025, DeepSeek-R1 has achieved computational reasoning capabilities that rival leading models from OpenAI, such as o1 and DALL-E3. Its release heralded a significant breakthrough in cost efficiency and open-source technologies in a space often dominated by firms like NvidiaThe growing interest in Deepseek coincided with a decline in Nvidia’s stocks, as the implications of a Chinese counterpart forced international onlookers, particularly Western nations, to reconsider their regulatory frameworks surrounding AI technologies.

Despite regulatory attempts led by the United States that sought to curtail the advance of Deepseek through various restrictions, the market remains optimisticThe momentum surrounding Deepseek did not only continue; it intensified, prompting a bullish trend across other related stocks in the Hong Kong marketNotably, companies like Meitu (stock code: 01357), SenseTime (stock code: 00020), and Kingsoft Software (stock code: 03888) all registered an average share price increase of over 20% across four trading days.

What this signifies is not merely the rise of a new AI frontier but reflects a broader narrative: that minor disturbances cannot suppress the ascendancy of indigenous AI technologies

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Analysts predict that Deepseek is poised to significantly alter the competitive landscape of the AI industry in China, fueling reevaluation of domestic tech stocks and potentially catalyzing a new wave of capital inflow.

The advent of Deepseek marks a pivotal success for homegrown AI technologiesSince the inception of ChatGPT, the industry has gravitated toward the Scaling Law principle—an established trend dictating that the efficacy of an AI model is directly proportional to the computational resources, model parameters, and data volume feeding itEssentially, this has led to an explosion in demand for hardware capable of supporting these massive models, with Nvidia at the forefront, witnessing a staggering increase in its market value, which soared nearly tenfold between 2023 and 2024.

Under the reigning Scaling Law, the market has seen an alarming concentration of power within the computing chip sector, akin to a monopoly held by NvidiaHowever, Deepseek's introduction is breaking this trend, offering a counter-narrative that democratizes access to advanced AI capabilities.

According to a research report by Guotai Junan, DeepSeek R1 has set its API pricing at a remarkably low threshold—merely 1 yuan for every million tokens processed—while demonstrating performance that rivals leading models like O1. It excels particularly in logical reasoning, mathematics, and Chinese language tasks, outstripping models such as GPT-4o and O1-miniWhat stands out about R1 is its portrayal of a future where high-efficiency AI models run seamlessly on less costly hardware, achieving computational prowess comparable to industry titans without the excessive financial stimulus that American tech giants typically require.

The innovation behind DeepSeek R1 is grounded in two groundbreaking algorithms: MOE (Mixture of Experts) and MLA (Multi-Head Latent Attention). These algorithms effectively resolve two major barriers in AI computing: memory and processing power

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MOE approaches the task by dividing large models into smaller, task-specific sub-models, drastically curbing the computational power neededMeanwhile, MLA—a refined adaptation of Google’s GQA method—uses mathematical transformations to optimize computing and memory use, combining and simplifying matrix operations to lessen the load.

Remarkably, with significant reductions in operational costs and resource requirements, Deepseek is remarkably close in performance to closed-source AI models offered by giants like OpenAIThis push elevates China’s position on the global AI stageIn recent years, the domestic AI market has surged dramatically, particularly observable in 2024, when the landscape became a hotbed for "hundred-model" innovationsIn this environment of rapid technological evolution, Deepseek stands out as it redistributes AI discourse power and aggressively counters American restrictions on high-end chip exports to China.

The implications of Deepseek’s rise are profoundThe current wave of interest in domestic AI development is evidenced by various A-share and Hong Kong-listed companies experiencing substantial surges in their respective sharesGiven its core technological advancements, there is a keen interest in how these stocks—particularly those aligned closely with Deepseek—perform moving forward.

Among notable stocks in the Hong Kong market, Kingsoft Cloud provides a comprehensive cloud computing architecture and operational ecosystem, grounded in the Kingsoft Group’s robust infrastructureWith a renewed commitment to AI, the company is enhancing its capabilities across various sectors, including cloud-native infrastructure and AI platforms, reflected in its operational improvements over the past yearDespite some volatility, recent data shows Kingsoft Cloud generating substantial revenues, particularly in AI sectors, as they reap the benefits of a strategic transformation aimed at capitalizing on AI opportunities.

Sensetime, another major player in the market, exemplifies the core essence of AI-driven enterprise

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