China’s little investors rush to AI trading tools after government’s policy reversal

China‘s pivot from cracking down on quantitative traders to embracing AI-driven retail trading marks a radical shift in its financial markets landscape. This transformation is upending traditional investment approaches as Chinese retail investors flock to tools like DeepSeek, investing substantial sums in AI trading education and creating a new battlefield where algorithms, rather than human intuition, increasingly determine market winners and losers.

The big picture: Chinese retail traders are rapidly adopting AI tools like DeepSeek for stock trading, just one year after the government’s crackdown on computer-driven quantitative traders.

The dramatic shift: Individual investors are paying premium prices for AI trading education, reflecting a complete reversal in market sentiment.

• Investors recently paid 15,800 yuan (approximately $2,200) for weekend lectures on AI stock trading, compared to the public outcry against quant funds just a year earlier.
• Chinese social media platforms are now saturated with online courses teaching traders how to leverage DeepSeek for company evaluation, stock selection, and coding trading strategies.

Why it matters: DeepSeek, backed by a quantitative fund, has fundamentally altered China’s market trajectory and perception of its hedge fund industry.

• The AI tool’s growing popularity is compelling brokerages and wealth managers to adapt their offerings and strategies.
• Just a year ago, quantitative funds were widely derided as “bloodsuckers” by retail investors, highlighting the remarkable transformation in market sentiment.

What they’re saying: Market educators are framing AI as an essential component of future trading success.

• “The future is the digital age, and AI will be vital,” Hong Yangjun told a packed room of individual investors eager to learn AI-powered trading techniques.
• Lecturers are comparing stock markets to technological battlegrounds, suggesting that future trading, like warfare, will be dominated by automated systems rather than human decision-makers.

Between the lines: Experts caution that investors may be placing excessive faith in AI trading tools despite their apparent advantages.

• “People trust AI models more than they trust financial advisers, which is probably misplaced trust at least at this stage,” warned Larry Cao, highlighting concerns about over-reliance on these emerging technologies.
• DeepSeek’s popularity stems primarily from its cost-efficiency and reasoning capabilities, but this doesn’t necessarily guarantee consistent investment success.