Amid the rapid development of science and technology, AI has attracted global attention. During the Spring Festival of the Year of the Snake, the emergence of DeepSeek shook the AI sector worldwide. Meanwhile, the remarkable performance of humanoid robots on the stage of China’s Spring Festival Gala further highlighted the potential of AI technology.
Currently, the AI industry is witnessing two clear trends: first, the imminent large-scale development of the energy infrastructure that AI urgently requires; and second, the intensifying competition among R&D companies, which is likely to bring about more dark-horse companies in the industry.
The rise of AI is akin to sounding the battle siren of silicon-based life against carbon-based life. AI is not only a catalyst for technological revolution, but also a core force of the transformation in productivity and even in production relations.
It’s both a crisis and an opportunity. History has proven that each technological leap reshapes the industrial landscape, creating new market leaders. Within this fierce race for AI, early investment is especially crucial, determining the direction of technological innovation while influencing the future market dominance. As AI deeply penetrates various sectors, new entrepreneurial opportunities are emerging at an accelerated pace. How global wealth managers seize this obvious mega trend, and identify and nurture truly disruptive companies, will be key to determining future competitive advantages.
Opportunities in cutting-edge tracks are often fleeting. ARK Wealth Management, a leading provider of global wealth management services under Noah Holdings Limited (NYSE: NOAH, HKEX: 6686), has consistently monitored emerging markets, helping global wealth managers uncover cutting-edge growth opportunities and tap into sustainable, long-term trends.
As more innovative AI companies emerge, we believe global wealth managers should adopt a diversified approach to their AI investments. Looking ahead, ARK will maintain its focus on the AI markets in the U.S. and China, seeking potential investment opportunities and capitalizing on new growth prospects in this rapidly evolving sector.
Beyond AI, Olive Asset Management(“Olive”) under Noah Holdings is also closely monitoring other promising investment areas, and has identified several high-potential sectors with undervalued opportunities, aiming to unearth additional growth avenues for investors.
DeepSeek has emerged as a formidable competitor in the market with significant advantages such as low costs, posing a considerable challenge to the major players in the chip industry.
On January 27th, Eastern Time, chip giant Nvidia’s stock price plunged by 16.9% in a single day, erasing US$590 billion in market value. The ascent of DeepSeek is widely viewed as the trigger for this steep fall.
The idea that "efficiency improvements will reduce the demand for computing power" can be examined in light of past trends in computing. As former Intel CEO Pat Gelsinger stated, “Computing obeys the gas law”— it always expands to fill available resources. From CMOS chips to multi-core processors, and from virtualization to cloud computing, each reduction in the cost of computing resources has led to explosive market growth rather than contraction.
Following the same logic, lower AI costs are expected to broaden its adoption across more industries, eventually becoming integrated into every aspect of daily life. This, in turn, will fuel an ever-increasing demand for computing power and data, not a decline.
Computing power remains indispensable in driving breakthroughs in AI. Over the past 70 years of AI development, computing capacity has consistently shaped both technological progress and competitive dynamics. The breakthroughs achieved by DeepSeek are also expected to inspire more AI companies to further improve their R&D efficiency, thereby widening the gap with competitors through the principle of "quantitative change leading to qualitative change." Meanwhile, Olive continues to closely monitor promising investment targets in the market and has identified several opportunities with investment potential.
In the wake of DeepSeek’s industry upheaval, not only will computing infrastructure continue to evolve, but large-language model (LLM) development will also undergo further transformations.
Specifically, DeepSeek's open-source strategy has carved out a more cost-effective pathway for model development within the AI sector. This democratization of technology not only accelerates the R&D efficiency of foundational models but also significantly reduce inference costs. As a result, more small and medium-sized enterprises can afford and adopt AI technology, and thus further expanding AI’s reach.
Historically, improvements in technological efficiency often stimulate greater resource consumption rather than reducing it—a phenomenon encapsulated in the "Jevons Paradox."
The reduction in AI costs driven by DeepSeek's technological breakthroughs will empower more enterprises and developers to employ large-scale AI models, potentially triggering a new round of explosive growth in the demand for computing power and data. This is also expected to give rise to more application-oriented AI companies, especially those focusing on specific industries and business scenarios.
The AI bubble theory has long been controversial in the market. Currently, the AI industry is still full of innovative vitality, with new algorithms iterating rapidly and dark horses emerging frequently. Almost every month, or even every few days, a new contender appears to challenge the status of existing leaders.
Given this development dynamic, investors should avoid focusing exclusively on a single dominant company and heavy investment in foundational model companies. Instead, a strategy of risk diversification is advisable.
Olive, which has been deeply involved in AI investing for many years, has also strategically invested in multiple foundational model companies with a forward-thinking vision.
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These portfolio companies are poised to benefit from emerging industry trends, capitalize on growth opportunities presented by the new generation of AI application-driven companies, and secure a strategic position in the rapidly evolving AI investment landscape.
The fierce competition in the industry also validates the broader of AI growth trajectory. Seizing industry trends is also the key proposition of VC investment.
Based on a diversified investment strategy, investors seeking to tap into AI opportunities should focus on both the Chinese and American markets.
In the long run, competition in AI technology may take on a cat-and-mouse dynamic:
On the one hand, open-source models accelerate innovation by lowering barriers and making technology more accessible. On the other hand, closed-source models rely on the integration of resources and long-term investment to drive the next wave of technological breakthroughs. These two paradigms coexist and propel one other, spurring industry-wide progress, and laying the groundwork for diversified AI development. In the foreseeable future, the symbiotic relationship between open-source and closed-source models will continue to shape the global AI ecosystem, driving ongoing technological evolution.
DeepSeek’s rise illustrates the robust innovation capacity of Chinese AI teams, even in a constrained environment, marking a new phase in the evolving U.S.-China AI landscape. While leading U.S. players continue to dominate in compute optimization, algorithmic advancements, and high-performance model development, Chinese teams are rapidly closing the gap through cost-efficient engineering innovations and open-source ecosystems.
Looking ahead, both the U.S. and China will steadily enhance their AI capabilities, driving a cycle of competitive innovation. Leading models, such as OpenAI in the U.S. and DeepSeek in China, are expected to establish dominance in different sectors and markets, shaping an increasingly regionalized AI ecosystem that blends competition and collaboration.
At Olive, we are committed to expanding our presence in both the U.S. and Chinese AI markets, identifying high-potential investment opportunities. By partnering with top-tier fund managers and leveraging deep market insights, we aim to help investors build diversified AI portfolios, capture long-term value, and navigate the evolving AI landscape.
As AI continues to reshape industries, Olive strives to help global wealth managers generate sustainable investment returns, while playing a key role in advancing AI-driven transformation and innovation.
