Chinese AI company DeepSeek recently made headlines, not just for its technology, but for inadvertently triggering a surge in the stock prices of several Chinese companies. This surge, however, appears to be based on nothing more than unsubstantiated rumors.
Following DeepSeek’s involvement in a U.S. tech stock sell-off, rumors began circulating in China about various public companies having ties to the AI firm. These rumors, spread through viral online lists, led to dramatic increases in the share prices of companies like Huajin Capital, Zhejiang Orient, and Sublime China Information.
Denials and Lack of Evidence
Sublime China Information publicly denied any cooperation with DeepSeek, and Huajin Capital also refuted claims of a DeepSeek investment to a Chinese business news outlet. Zhejiang Orient has yet to comment, but no public evidence supports the claim that they are DeepSeek investors.
DeepSeek, a private company, has never publicly announced any VC investments. Chinese corporate records confirm that its founder, Liang Wenfeng, is the beneficial owner of the entities that comprise DeepSeek. Wenfeng has stated that DeepSeek is funded by his quant firm, High-Flyer, and has no plans to raise outside capital. He also mentioned in a 2023 interview that VCs seemed hesitant to invest in a research-focused company.
Author’s Opinion
The DeepSeek stock rally serves as a stark reminder of the power of rumors and misinformation in the market. The fact that stock prices can skyrocket based on unsubstantiated claims highlights the need for investors to exercise caution and conduct thorough due diligence before making any investment decisions. This incident also underscores the potential for market manipulation and the importance of regulatory oversight to protect investors from such unfounded rallies.
Featured image credit: Tim Reckmann via CCNull
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