Beyond DeepSeek’s rejection: institutional investors and corporate AI technology innovation in China
Xianfang Su, Zeyu Wang, Youwen Jiang, Yujuan Yang, Binye Wu · Applied Economics Letters · 2025
The rejection of institutional investors by DeepSeek highlights the conflict between the short-term profit-seeking behaviour of institutional investors and the long-term focus on AI technology innovation by enterprises. Utilizing AI patent data from Chinese firms, this paper empirically demonstrates the inhibitory effect of institutional investors on corporate AI technological innovation in emerging markets. However, in the heterogeneity test of state-owned enterprises and qualified foreign institutional investors, we did not find such an inhibitory effect. We find that speculative trading purpose and collusive market power are the key factors driving this influence. Our study offers a novel perspective on understanding the role of institutional investors in emerging markets.