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.

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.

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.

Robust gains by Chinese tech stocks have added billions of dollars in their market capitalization, driven by the sudden rise to fame by homegrown AI app DeepSeek.

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.