In a remarkable turn of events for the Hong Kong stock market, Tencent Holdings, one of China's largest technology companies, experienced an impressive rise in its stock price on February 17th, 2023. For a portion of the trading day, shares soared more than 5%, reaching the significant benchmark of HK$500 per shareBy the end of the trading session, the stock had slightly moderated to a still impressive increase of 3.96%, closing at HK$493.6 per share.

Throughout recent weekends, both Tencent and its rival Baidu announced the integration of DeepSeek, an AI search tool, into their respective productsHowever, Baidu found itself struggling, with its stock price dipping to HK$8.70 at one point during the trading dayThis volatility illustrates the competitive pressures in the technology sector, where advancements in AI technology can have significant impacts on stock valuations.

Interestingly, since mid-January of this year, Tencent's stock prices have exhibited a trend of fluctuation with an upward trajectoryBeginning at HK$366 per share on January 13, the stock surged to a closing price of HK$474.8 on February 14. In stark contrast, back in February 2021, Tencent’s stock peaked at an impressive HK$700 during intraday trading—a benchmark that illustrates the highs and lows of the technology marketAdditionally, a number of Tencent-related stocks rallied during the trading session; for instance, Weimob Group surged over 10%, while both China Literature and Youzan climbed over 3%.

As insights from the investment community have emerged, it has become clear that Tencent’s WeChat AI search has officially integrated the DeepSeek-R1 model, currently undergoing gray testingThe company previously informed reporters that the WeChat search utilizes the “Hunyuan” large model to enrich its AI search capabilities, providing users included in the gray testing phase the opportunity to utilize the full version of DeepSeek-R1 at no cost

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It is worth noting that this AI-powered search function only amalgamates public information from official accounts and other accessible internet sources, while ensuring that user personal information remains untouched and confidential.

In a related sphere, Tencent Docs has officially incorporated the AI document assistant feature, tapping into the capabilities of the DeepSeek-R1 modelThis functionality allows users to automatically generate documents, spreadsheets, presentations, and mind mapsMoreover, companies like Toyota and others have announced that they will leverage Tencent Cloud’s knowledge engine to harness the power of the DeepSeek modelWithin the Tencent ecosystem, other products such as the Tencent Cloud AI Code Assistant and the Tencent Yuanbao app have also integrated DeepSeek-R1, emphasizing the extensive utilization of advanced AI models across its servicesNotably, analysts from UBS have projected that the adoption of DeepSeek among Tencent’s offerings could yield increased traffic for content and facilitate the advancement of AI capabilities within WeChat.

Tencent stands at the intersection of being both a developer and an applicator of large AI modelsBesides working with open-source models like DeepSeek-R1, the company also invests in the development of proprietary models that showcase its technological prowessDuring a company conference in January, CEO Pony Ma expressed hopes that various business groups would embrace the commercial potential of large AI modelsHe indicated that products like WeChat, QQ, input methods, and web browsers are set to unveil AI-driven functionalities, while areas such as gaming, reading apps, and Tencent Video will further explore advancements based on their proprietary model, Hunyuan.

A plethora of experts from the AI industry have highlighted that the effectiveness of the open-source DeepSeek-R1 model can be compared to that of OpenAI’s models, suggesting that 2023 could be a year filled with opportunities for AI applications

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Nevertheless, the expanding reach of open-source projects poses a challenge to some of the closed-source large model providers, stirring a competitive landscape that could reshape future tech market dynamics.

The recent buzz surrounding DeepSeek has ignited discussions in the capital markets regarding the revaluation of Chinese assetsNumerous institutions have begun to engage in conversations about this phenomenon, indicating a potential pivot towards recognizing the inherent value within China’s technology sector.

On February 16, China International Capital Corporation (CICC) released a report emphasizing the strong and accelerating market trend following the Lunar New YearThe Hang Seng Tech Index surged by 7.3%, surpassing its peak from October of the previous year, thereby marking a new high since early 2022. Alongside this, the Hang Seng Index also rose by 7.0%, nearing the October peak of 23,100 pointsCICC attributes this rebound primarily to a renewed optimism about technology trends, with the recent spike being spurred by DeepSeek's emergence on the scene, prompting a reassessment of the tech sector and the Chinese economy as a wholeShould sentiment across other sectors remain stable, positivity in the tech sector could elevate the Hang Seng index toward approximately 24,000 points in the near future.

In another revealing report, Deutsche Bank Group pointed out that 2025 could be a pivotal year for the global investment community's reassessment of China’s international competitivenessThe report highlighted that Chinese companies continue to cultivate a dual advantage in pricing and quality within high-end manufacturing and services spheres, with China’s disruptive innovations reshaping the competitive landscape across various industriesMeanwhile, Goldman Sachs has remarked that the rise of DeepSeek presents a long-term opportunity for revaluation in Chinese tech stocks, maintaining an overweight rating for the MSCI China index with an expectation of a 14% rise this year.

Meanwhile, Minsheng Securities noted that the global market's focus has unequivocally been on the asset revaluation spurred by DeepSeek's introduction

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