According to a Reuters report posted on March 25, Chinese AI firms have made significant progress in closing the technology gap with the U.S., with some areas now only three months behind, according to 01.AI CEO Lee Kai-fu. He highlighted DeepSeek’s advancements in optimizing chip usage and algorithm efficiency, allowing China to compete more closely in AI development. Despite U.S. semiconductor sanctions, Chinese companies have adapted by improving their algorithms, with DeepSeek even surpassing expectations in certain areas like infrastructure software engineering.
As per the report, Lee emphasized that investing in proprietary models is becoming more challenging due to competition from major tech firms and open-source alternatives, leading 01.AI to focus on AI applications instead. The company recently launched Wanzhi, a platform for enterprise AI deployment, and expects substantial revenue growth in 2025.
China Advances AI Despite US Chip Export Controls
Senior foreign officials and major tech companies are urging the Trump administration to ease AI chip export restrictions. In a discussion on March 25, Bloomberg Intelligence analyst Mandeep Singh explained that initial U.S. controls began in 2022 under the Biden administration, limiting the semiconductor kingpin’s high-end chip shipments to China by restricting interconnect bandwidth. These measures expanded with a 168-page diffusion rule categorizing countries based on access levels. Despite restrictions, Chinese firms like Ant Group continue AI advancements by optimizing available resources, including Huawei and AMD chips, reducing pre-training costs by 20% through heterogeneous computing.
According to Singh, the semiconductor kingpin argues that these restrictions are cutting into its revenue, with its China exposure dropping from 20% to below 10%, while AI firms like OpenAI claim the market remains undersupplied, further driving demand for GPUs. Singh noted that U.S. AI models still outperform Chinese counterparts in reasoning and multimodal tasks, giving them a competitive edge. Furthermore, investors remain confident in the Mag 7 stocks, viewing market dips as buying opportunities. However, concerns are rising about data center expansion and energy supply challenges, especially in regions beyond traditional hubs like Virginia.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s Q4 database of over 1000 hedge funds.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
9. Aurora Mobile Limited (NASDAQ:JG)
Number of Hedge Fund Holders: 1
Aurora Mobile Limited (NASDAQ:JG) provides developer services, market intelligence, financial risk management, and advertising solutions for different industries in China.
On March 26, Aurora Mobile’s GPTbots.ai partnered with EasyCraft to integrate AI-driven solutions into business process automation, knowledge management, and multi-platform collaboration. EasyCraft is known for its enterprise automation platforms, and it will incorporate GPTbots.ai’s AI agents to improve workflow automation, third-party integrations, and multi-device accessibility. The collaboration also focuses on AI-powered low-code development and advanced knowledge management using Retrieval-Augmented Generation technology. In addition, both companies plan joint marketing efforts and industry-specific AI solutions for sectors like finance, manufacturing, healthcare, and retail, aiming to accelerate enterprise digital transformation globally.
8. Asure Software, Inc. (NASDAQ:ASUR)
Number of Hedge Fund Holders: 8
Asure Software, Inc. (NASDAQ:ASUR) provides cloud-based HCM solutions, including payroll, tax management, HR compliance, and workforce management for small and mid-sized businesses.
On March 25, Asure Software announced that it is advancing its partnership with Amazon Web Services (AWS) to integrate AI-driven solutions into its Human Capital Management software. Asure’s CTO, Yasmine Rodriguez, emphasized that AWS’s technology enables rapid deployment of AI-powered innovations that will reshape HR and payroll systems. Future developments aim to automate payroll, improve compliance tracking, and provide personalized HR solutions at scale.
