China Securities Co., Ltd. maintains a positive outlook on the AI and computing power sector, emphasizing the strategic integration of AI with commercial space initiatives such as space-based data centers.
Alibaba recently stated that its three-year capital expenditure plan of 380 billion yuan might be conservative, adding that an AI bubble is unlikely in the near term. The company reported strong growth in its cloud division, with Q2 revenue reaching 39.824 billion yuan, up 34% year-over-year. AI-related products have now achieved triple-digit growth for nine consecutive quarters. Alibaba's capital expenditures surged 80% to over 31.5 billion yuan, driven by high demand for AI servers.
Market attention has shifted to Google’s latest large-scale AI models and its supply chain. While Google’s new models demonstrate significant performance improvements, competition in the AI space remains open, with further advancements expected from continued training. Investors are advised to monitor not only Google’s ecosystem but also alternative supply chains.
Beijing plans to deploy gigawatt-level data centers in low Earth orbit (700–800 km), with companies like Google, SpaceX, and Amazon actively developing space-based AI computing clusters. This emerging trend highlights the convergence of AI and commercial aerospace, presenting opportunities in satellite manufacturing, energy solutions, and thermal management technologies.
Alibaba also unveiled its AI-powered glasses, Quark S1, featuring Micro LED and diffractive waveguide technology, integrated with its Qianwen AI system. The glasses support voice assistance, real-time translation, and smart recommendations while seamlessly connecting with Alibaba’s ecosystem (Taobao, Alipay, Amap). The product offers a novel solution for nearsighted users by combining waveguide modules with prescription lenses. With tech giants like Google re-entering the smart glasses market, the sector is poised to become a key AI interface, driven by advancements in display technology, lightweight components, and battery efficiency.
**Risks to Consider**: Geopolitical uncertainties may disrupt supply chains and overseas expansion; tariffs could exceed expectations; slower-than-expected AI adoption may dampen cloud computing demand; intensified competition may erode margins; currency fluctuations may impact export-oriented firms in ICT and optical sectors; delays in digital economy initiatives or telecom cloud investments could hinder growth.
Comments