Goldman Sachs has projected a substantial uplift in China’s artificial intelligence (AI) sector, estimating that widespread AI adoption could enhance Chinese earnings per share by 2.5% annually over the next decade. This growth is anticipated to attract over $200 billion in portfolio inflows, significantly impacting the Chinese market.
A key contributor to this optimistic outlook is DeepSeek, a Chinese AI startup that has developed a competitive large language model at a fraction of the cost incurred by its American counterparts. This breakthrough has not only demonstrated the innovative capabilities of Chinese engineers but has also ignited a surge of nationalistic investment in AI-related stocks within the country.
The success of DeepSeek has prompted major Chinese corporations, including Huawei, Alibaba, and Baidu, to explore collaborations and integrate DeepSeek’s cost-effective AI solutions into their operations. This trend signifies a broader movement towards the integration of advanced AI technologies across various industries, such as e-commerce, finance, and healthcare, further propelling the sector’s growth.
While the prospects are promising, Goldman Sachs advises caution. The firm emphasizes the necessity for robust policy support to address underlying macroeconomic challenges and to ensure sustainable growth in the equity markets. This includes implementing fiscal measures to mitigate external pressures and stimulate domestic demand.
