Chinese AI startups rise despite Hong Kong tech index decline

# China's AI Startups Grow Despite Hong Kong Tech Index Decline

Hong Kong's stock market demonstrates paradoxical behavior: the main Hang Seng index is losing ground, the tech sector is declining by 1.68%, while the generative AI sector is making a sharp jump. Zhipu AI surged nearly 25%, MiniMax added more than 14%, semiconductor manufacturers accelerated their growth. This divergence reflects a fundamental shift in the priorities of global investors and a revaluation of strategic assets in Asia's capital markets.

The context of volatility is easily explained by current pressure on Asia's technology sector. Rising interest rates from the US Federal Reserve, geopolitical tension around semiconductor technology, and concerns about a global slowdown in economic growth create an unfavorable backdrop for most tech companies. However, this backdrop is selective: companies able to offer a unique position in the rapidly growing AI segment receive generous bonuses from investors ignoring the overall decline.

The growth of Zhipu AI and MiniMax is not merely daily volatility, but a symptom of capital reorientation. Both startups are local competitors to OpenAI, developing their own large language models amid constant sanctions restrictions on importing American AI technologies. This is why they are valued as strategic locally-produced assets. Zhipu AI recently attracted investment from major Chinese tech giants and state funds, positioning itself as an alternative to Western solutions. Its 25% growth in a single trading day speaks to eager demand for Chinese AI solutions capable of operating under local restrictions and requirements.

The parallel growth of semiconductor companies like Tianshu Zhixin and GigaDevice indicates that investors understand the infrastructure nature of AI development. Without a reliable chip supply chain, China's generative AI sector will not be able to scale. Therefore, investors diversify positions across the entire AI stack, from model development to providing computational power. The 12% decline of NetEase Cloud Music and other media companies shows a revaluation of traditional media assets, whose monetization models are becoming less attractive to capital markets focused on the race for AI leadership.

Net capital inflows through the "southbound channel" amounted to 2.79 billion Hong Kong dollars — this means foreign investors are actively buying Hong Kong securities despite the general index decline. Intraday volatility masks a strategic capital flow: investors are leaving outdated media assets and entering the new wave of AI companies providing local solutions for the Middle Kingdom. This is not merely a stock exchange game, but positioning ahead of a long-term reshuffling of the artificial intelligence market.

The significance of this movement extends beyond Hong Kong. It testifies that global investors believe in the Chinese sector's ability to develop competitive AI solutions despite sanctions and restrictions. When local startups grow by 20-25% amid market panic, it is a signal that a paradigm shift is being prepared. China is moving in the direction of technological independence in the AI sphere, and the Hong Kong capital market is already revaluing assets with this new reality in mind.