By Harry Wu, 21st Century Business Herald, SFC

“We believe that Chinese tech companies are well placed in the AI cycle,” said  Luca Paolini, Chief Strategist at Pictet Asset Management, in a recent interview with 21st Century Business Herald.

Taking DeepSeek as an example, its ability to offer model performance comparable to that of the US at a relatively low cost gives China a competitive edge. Besides its huge market, China has another significant advantage: its remarkable growth in power grid development and electricity generation, coupled with virtually no major restrictions like those in the US or Europe.

Paolini emphasized that over the past 12 months, investors have gradually realized that the real change in the market is that the benefits of AI are not limited to the US. With such a massive scale of global AI investment, everyone will benefit sooner or later. However, the US's first-mover advantage is rapidly disappearing.

Paolini believes that the business models of Chinese technology companies differ from those of their US counterparts. Open‑weight models and a huge domestic market will bring many benefits to Chinese companies, and the current positive momentum for Chinese technology stocks will continue.