China's AI Compute Demand Likely to Boom in Next Few Years

Dow Jones06-25

0324 GMT - China's AI compute demand is likely to boom in the next few years, according to HSBC analysts in a research note. This is mainly driven by demand for large language model training and inference, they say. Domestic hyperscalers are rapidly increasing their capital expenditure, with the combined spending of ByteDance, Alibaba and Tencent reaching 346 billion yuan in 2025 and is likely to more than double to over 700 billion yuan in 2026, HSBC points out. "This is still well below the spending intensity of U.S. peers, indicating there's substantial growth potential," HSBC says. Leading AI data center operators and key supply chain participants should benefit from the trend, it adds. (tracy.qu@wsj.com)

(END) Dow Jones Newswires

June 24, 2026 23:24 ET (03:24 GMT)

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Domestic hyperscalers are rapidly increasing their capital expenditure, with the combined spending of ByteDance, Alibaba and Tencent reaching 346 billion yuan in 2025 and is likely to more than double to over 700 billion yuan in 2026, HSBC points out. \"This is still well below the spending intensity of U.S. peers, indicating there's substantial growth potential,\" HSBC says. Leading AI data center operators and key supply chain participants should benefit from the trend, it adds. 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This is mainly driven by demand for large language model training and inference, they say. Domestic hyperscalers are rapidly increasing their capital expenditure, with the combined spending of ByteDance, Alibaba and Tencent reaching 346 billion yuan in 2025 and is likely to more than double to over 700 billion yuan in 2026, HSBC points out. \"This is still well below the spending intensity of U.S. peers, indicating there's substantial growth potential,\" HSBC says. Leading AI data center operators and key supply chain participants should benefit from the trend, it adds. 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This is mainly driven by demand for large language model training and inference, they say. Domestic hyperscalers are rapidly increasing their capital expenditure, with the combined spending of ByteDance, Alibaba and Tencent reaching 346 billion yuan in 2025 and is likely to more than double to over 700 billion yuan in 2026, HSBC points out. \"This is still well below the spending intensity of U.S. peers, indicating there's substantial growth potential,\" HSBC says. Leading AI data center operators and key supply chain participants should benefit from the trend, it adds. 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