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.

DeepSeek could spark a shift from hardware to software, similar to what happened to traditional computing beginning in the 1990s.

Entrepreneur Marc Andreessen, known for co-writing Mosaic, one of the world’s first web browsers, wrote Sunday on X that “DeepSeek R1 is AI’s Sputnik moment,” likening it to the space race between the U.S. and the Soviet Union and the event that forced the U.S. to realize that its technological abilities were not unassailable.

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.

Beijing’s growing clout in the artificial intelligence space has sparked a wave of optimism toward Chinese tech shares, with a gauge approaching a technical 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.