Chinese AI stocks: $1.75B inflow as Hangzhou bars job cuts

Morgan Stanley expects $1.25B–$1.75B to flow into Hong Kong’s tech sector when Chinese AI model firms Knowledge Atlas (Zhipu AI) and MiniMax join the Hang Seng Tech Index on June 8. Even after the Hang Seng Tech Index fell more than 11% since January, both companies’ shares have surged. Knowledge Atlas target was raised to 990 HKD from 560 HKD, and MiniMax to 1,100 HKD from 990 HKD. Chinese AI stocks are also benefiting from IPO support: technology firms accounted for 40% of Hong Kong IPO capital raised so far this year, and 43% of deals in the pipeline. Pricing is changing too. Chinese AI model access costs rose to at least 17% of U.S. pricing in the first quarter, up from 5% a year earlier—so the “cheap AI” gap is narrowing. Morgan Stanley projects leading Chinese AI model makers to each generate at least $1B revenue in 2025, doubling in 2026. Separately, a Hangzhou Intermediate People’s Court ruled companies cannot legally fire workers merely to replace them with AI systems. The court said employers cannot shift operating costs to employees, and technology upgrades must not be used to cut pay or terminate contracts. Overall, this news ties Chinese AI stocks momentum in Hong Kong to a pro-jobs regulatory backdrop, potentially improving AI adoption sentiment.