The rise of artificial intelligence in China’s hedge fund industry is triggering an AI arms race among asset managers, with quant fund High-Flyer leading the charge. The firm not only integrates AI into its multi-billion-dollar portfolio but also founded DeepSeek, a groundbreaking AI startup that has shaken up Silicon Valley’s dominance.
Following High-Flyer’s success, emerging hedge funds like Baiont Quant, Wizard Quant, and Mingshi Investment Management are aggressively investing in AI research, while major mutual fund companies are incorporating DeepSeek into their trading strategies.
“We are in the eye of the storm of an AI revolution,” said Feng Ji, CEO of Baiont Quant, whose firm relies entirely on machine learning for trading decisions. “Two years ago, AI-powered funds were met with skepticism—today, those who resist AI risk going out of business.”
AI Arms Race and Government Support
To stay competitive, firms are leveraging AI to analyze market data and develop trading signals, mirroring U.S. systematic trading giants like Renaissance Technologies and D.E. Shaw. The demand for AI talent is surging, with Wizard Quant launching a dedicated AI lab and Mingshi’s Genesis AI Lab actively recruiting top computer scientists.
Local governments are also stepping in to support AI-driven finance. Shenzhen, for example, has pledged 4.5 billion yuan ($620.75 million) to subsidize hedge funds’ computing power needs, fostering further AI innovation.
DeepSeek Reshaping China’s Mutual Fund Industry
China’s mutual fund industry is embracing AI at an unprecedented pace, with leading firms like China Merchants Fund, E Fund, and Dacheng Fund integrating DeepSeek into their operations.
“DeepSeek has drastically lowered the barriers for AI applications in asset management,” said Hu Yi, vice general manager at Zheshang Fund Management. AI-powered tools are now handling tasks like market monitoring and investment analysis, allowing human analysts to focus on strategic decision-making.
As AI levels the playing field between smaller Chinese funds and their larger U.S. counterparts, Baiont’s Feng sees a new era unfolding: “With AI, an investor can gain 20 years of experience in just two months using 1,000 GPUs.”
