Chinese Retail Traders Turn to AI with DeepSeek, Redefining Quant Fund Perception
In a dramatic shift, Chinese retail traders are turning to AI tools like DeepSeek, a quant-based platform, to enhance their market strategies. This trend is part of a broader move toward embracing computer-driven models, which has grown in popularity despite last year’s government crackdown on such funds. Online courses and weekend workshops have become essential for many investors eager to harness AI’s potential to predict stock movements and craft trading strategies. This change signals a new era for China’s $700 billion hedge fund industry, as AI tools like DeepSeek challenge the traditional perception of quantitative trading as an unfair market force.
The rise of DeepSeek has significantly altered the public’s view of quantitative trading. Whereas just a year ago, AI-driven funds were viewed with suspicion, many retail investors now see AI as an essential tool for beating the market. Brokerages and wealth managers have started integrating AI into their platforms to meet growing demand from clients. This shift is happening amid a positive start to the year for Chinese stocks, with analysts praising AI’s ability to support better-informed investment decisions and foster a more efficient market.
DeepSeek, a Chinese AI startup backed by the hedge fund High-Flyer, is central to this transformation. Retail traders are increasingly using it to analyze companies, select stocks, and automate trading decisions. Unlike other AI models, DeepSeek is cost-effective and available in China, where alternatives like ChatGPT are not accessible. With social media buzzing with AI-focused tutorials, traders are eager to adopt DeepSeek for its user-friendly interface and quick decision-making support. This growing reliance on AI has led some experts to caution against over-reliance, warning that AI models, while powerful, are not infallible.
As DeepSeek reshapes how retail investors approach stock trading, it also challenges the role of traditional financial advisers. Investors now prefer AI-driven models over human advice, pushing brokerages to integrate similar technologies. However, experts like Larry Cao from FinAI Research warn that excessive trust in AI could lead to overconfidence and market herding. Despite these concerns, AI’s increasing role in investment strategies is undeniable, and its influence on China’s retail trading culture is set to grow, possibly transforming the global investing landscape.
SOURCE: REUTERS
