By Eric Peters, CIO of One River Asset Management
“China went from being a really interesting market to being uninvestable after Xi’s crackdown in 2020,” said the CIO. “It’s been in the doghouse ever since.” We were scanning the world, looking for the next big theme. “Then came DeepSeek and Trump’s trade war, and it helped us see that despite the trade controls, the tech restrictions, the various forms of sand thrown into the gears, Chinese tech companies have nevertheless gotten to being good enough,” he said. “And for many in the world, good enough works as long as it comes at the right price.”
“They’ve discovered that if you produce less advanced chips but use more of them, you can still produce pretty good results,” continued the CIO. “You just need more power.” China is long power, while the US faces a shortage in 2026-27 based on forecasts for new data center demand. “If China is able to establish Huawei hardware and a Huawei operating system on an AI datacenter stack running DeepSeek or Tencent or Alibaba at the LLM level, and if it works in SE Asia and Africa and Russia and other places, they become the defacto stack.”
