DeepSeek and other Chinese AI models spark investor interest in Hong Kong IPOs
15 IPOs were announced in the city in the first quarter of 2025, according to KPMG, 6 of which raised more than HK$1 billion – many of these were tech companies
Hong Kong is experiencing a resurgence in IPO activity with global investor interest in artificial intelligence (AI) companies from mainland China a key component of the growth.
“DeepSeek’s innovative approach to AI development marks a significant shift in the industry, challenging the conventional belief that ‘bigger is better’,” said Louis Lau, head of the Hong Kong Capital Markets Group at KPMG China. “Instead of relying solely on increasing model size and computational power, DeepSeek emphasises ‘architectural efficiency’, which involves designing models to work smarter and more effectively with available resources.”
The approach resonated with investors, particularly those watching to see how Chinese firms can achieve high levels of performance without access to the most advanced US-made chips.
“By delivering high performance at a lower cost, DeepSeek’s models significantly lower the barriers to entry for smaller companies,” Lau explained. “The potential for widespread adoption of these cost-effective solutions presents a lucrative opportunity for investors.”
Ross O’Brien, analyst-in-chief at Delta Analysis, echoed this optimism. “China has a robust ecosystem of digital technology firms,” he said. “This broad, deep technology base and clear indications from the market that machine learning is rapidly being developed at scale in China gives investors confidence about China AI bets.”