Despite the rally, some analysts warned of near-term corrections due to macro uncertainties and fluctuating investor sentiment.

The AI rally in Chinese stocks intensified as Zhipu AI led gains of around 30% after unveiling GLM-5, an open-source LLM with stronger coding capabilities and long-running agent tasks.

RAND research highlighted Chinese AI models cost only a fraction of comparable U.S. models, underscoring a frugal, practically oriented development approach focused on domestic markets.

Even with the rally in AI, broader sentiment soured for large Chinese tech names, though the Hang Seng Tech index managed a later uptick after initial declines.

Observers say China’s strategy centers on government backing and cost efficiency to compete with U.S. peers, while potential data-security and government-access concerns may limit Western market expansion.

The U.S. AI sector remained volatile, with investors weighing transformative potential against overvaluation concerns; a JPMorgan strategist said the AI bubble debate may be premature given solid fundamentals.

Overall, the sector saw a broad surge driven by new model releases, supportive policy signals, and shifting investor sentiment, even as broader tech peers showed mixed performance.

Shanghai STAR AI Industry Index rose about 1.7% intraday, illustrating positive sentiment for AI equities despite declines in some giants.

MiniMax joined the rally with roughly an 11% rise following its update to the M2.5 open-source model, which adds enhanced AI agent tools.

Analysts noted cautious but constructive sentiment around AI infrastructure and cloud providers in China, favoring solid names with strong fundamentals and restrained domestic capex compared with the U.S.

Tencent and Alibaba slipped, down 2.6% and 2.1% respectively, contributing to a 1.7% decline in the Hang Seng Tech index, signaling selective strength within the broader tech sector.

The rapid launches signal accelerating growth in China’s AI sector and pose a test for whether gains can sustain beyond initial hype.