Key Takeaways:
Knowledge Atlas Technology Corp. shares surged as much as 42% to HKD 2,980 on Monday, pushing its market cap past HKD 1 trillion.
"The gap between Chinese and US large language models may not take that long to close," Tang Jie, founder and chief executive officer of Knowledge Atlas, said in response to Elon Musk's forecast.
The stock was last at HKD 2,562, up 22%, with turnover reaching HKD 6.1 billion. The seven-session winning streak has more than doubled the company's value since its Hong Kong listing in January. CLSA initiated coverage with a hold rating and a price target of HKD 1,500, implying downside from current levels.
The rally shows investor conviction that Chinese AI companies are closing the gap with US rivals faster than expected. Musk, chief executive officer of Tesla Inc., said on social media that China's LLMs could reach the level of Anthropic's Fable model by the first quarter of 2027, a timeline that people familiar with the industry view as conservative, estimating the gap at less than seven months.
Knowledge Atlas, known for its GLM-5.2 model, listed on the Hong Kong Stock Exchange in January under the ticker 02513.HK. The company's GLM-5.2 has narrowed the performance gap with leading US models, according to industry benchmarks cited by the company. The stock has gained more than 100% since its listing, driven by optimism over China's AI capabilities.
The Hang Seng Index traded mixed on Monday, while the Hang Seng Tech Index moved in sympathy with Knowledge Atlas's surge. The Shanghai Composite edged higher, tracking AI-driven optimism across the broader China tech sector. The offshore yuan traded near 7.25 per dollar, little changed on the session.
The debate over the China-US AI gap has intensified since DeepSeek's R1 model disrupted the market in January 2025, erasing US$1 trillion from American tech valuations in a single day, according to The Economist. Nvidia briefly lost 17% of its value, while the Nasdaq fell 3.1% in that session. Knowledge Atlas's latest gains suggest investors are betting the next breakthrough may come from China, reshaping the competitive dynamics of the global AI industry.
The surge in Knowledge Atlas comes as Chinese AI companies attract growing investor attention following a series of model releases that have narrowed the technology gap with US peers. DeepSeek, Baidu's Ernie, and Alibaba's Qwen have all released models that compete closely with US counterparts on key benchmarks, often at a fraction of the development cost.
The HKD 1 trillion market capitalization places Knowledge Atlas among the most valuable technology companies listed in Hong Kong, alongside Tencent Holdings (0700.HK) and Alibaba Group (9988.HK). The stock's rally also reflects broader enthusiasm for AI-related names in Hong Kong and mainland China, where investors are betting that domestic champions can capture a significant share of the growing AI market.
This article is for informational purposes only and does not constitute investment advice.
