DeepSeek’s advancements in artificial intelligence have played a key role in driving hedge funds back into Chinese equities, as optimism surrounding the technology rally adds to expectations for more economic stimulus in China. This marks a reversal from recent years, when funds favored India due to its infrastructure spending and potential as a manufacturing alternative to China. Over the past month, China’s equity markets have surged by over $1.3 trillion, while India’s market has contracted by more than $720 billion. Despite some skepticism, particularly over China’s valuation and trade tensions, the AI-driven shift has renewed interest in Chinese tech stocks, with the MSCI China Index set to outperform India’s for a third consecutive month.