In recent times, several foreign financial institutions have expressed a positive outlook on China's AI industry chain. For instance, Goldman Sachs released a report stating that China's AI supply chain possesses unique competitive advantages that are currently undervalued by the market, particularly in the areas of infrastructure, power, and semiconductors. Quantum Strategy's asset allocation strategy also explicitly recommended investing in Chinese AI-related assets.
From my perspective, the renewed interest and positive reassessment of China's AI industry chain by foreign institutions is underpinned by three core rationales.
First, China's AI industry possesses a comprehensive and difficult-to-replicate competitive advantage across the entire value chain.
Firstly, the country leads globally in computing infrastructure and its energy foundation. Leveraging a nationally integrated computing power network, large-scale domestic AI computing clusters with tens of thousands of GPUs are being deployed, with data center construction and delivery efficiency significantly ahead of international peers. This is coupled with the world's largest supply of wind and solar green power and a robust, stable new power system, which addresses the high energy consumption pain point of AI computing. Secondly, with accelerated technological breakthroughs, China has achieved mass production in areas like memory and high-speed interconnect equipment, forming a complete supply chain from server systems to liquid cooling solutions, thereby reducing external dependencies. Thirdly, a wealth of diverse application scenarios provides the AI industry with vast commercial potential.
It is evident that China has now established a complete AI value chain: upstream components like computing hardware, liquid cooling, optical modules, and storage devices have achieved mass production; midstream domestic large language models and cloud platforms have been commercialized; and downstream solutions in industrial intelligence and autonomous driving are being exported in volume. This tangible growth in performance makes the business prospects for Chinese AI companies increasingly clear.
Second, the current "valuation gap" is attracting the attention of global capital.
Data calculated by Goldman Sachs highlights a current market pricing imbalance: since the end of 2022, the total market capitalization of global AI-related listed companies has increased by $34 trillion, yet the contribution from Chinese stocks has been relatively low. The current total market cap of China's AI sector is only about $4 trillion. Considering its industrial advantages, this figure still has significant room for growth.
During the evolution of the AI market over the past two years, global capital has been more focused on the so-called "Magnificent Seven" U.S. tech giants. However, as more capital begins to seek new growth themes and as orders within China's AI industry chain continue to expand significantly, China's AI industry has become a new focal point for global capital.
Third, increased policy support is solidifying the foundation for long-term industrial growth.
Continued strengthening of relevant policy support provides crucial backing for the construction of computing power networks and green computing infrastructure. This support works to address shortcomings in areas like computing hardware, storage, and high-end interconnect equipment on one hand, while on the other hand promoting the deep integration of AI with sectors such as manufacturing, transportation, and energy. This stable, long-term, and systematic policy support provides a foundation for China's AI sector to consistently deliver performance, which is also a significant advantage in attracting foreign institutions.
Of course, the industry's development still faces numerous challenges. For example, continued investment is needed in breakthroughs for high-end materials and advanced equipment, and risks such as overseas trade barriers and periodic production capacity fluctuations cannot be ignored. Only companies with strong technological moats and global delivery capabilities will be able to sustainably benefit from valuation premiums.
In my view, the collective bullish stance of foreign investors on China's AI industry chain sends a clear signal: driven by the convergence of factors including policy, demand, and capital, China's AI industry has entered a golden stage of rapidly advancing commercialization, which also serves as a key support for valuation expansion.
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