Chinese hedge fund High-Flyer’s use of artificial intelligence in trading markets has spurred an AI arms race among mainland asset managers that could shake up the country’s $10 trillion fund management industry. Quant fund High-Flyer not only deployed AI in its multi-billion dollar portfolio, it also built China’s most notable AI start-up DeepSeek whose cost-effective large language model stunned Silicon Valley and undermined Western dominance of the AI sector. In its wake, aspiring Chinese hedge fund managers such as Baiont Quant, Wizard Quant and Mingshi Investment Management are stepping up AI research, while dozens of mutual fund companies are rushing to incorporate DeepSeek into their investment workflow. “We are in the eye of the storm” of an AI revolution, said Feng Ji, chief executive of Baiont Quant, which uses machine learning to trade markets with no human intervention. “Two years ago, many fund managers would look at us AI-powered quants with mockery or disbelief,” said Feng. “Today, these sceptics could be out of business if they don’t embrace AI.” Most of these funds use AI to process market data and generate trading signals based on their investors’ risk profiles, rather than produce DeepSeek-like models.

Full report : DeepSeek spurred a Chinese asset manager AI arms race that could shake up China’s $10 trillion fund management industry, as firms expand AI research and adopt DeepSeek.