Artificial intelligence is set to become "a key driver for China's modernization," according to Huachuang Securities, aligning with the positive perspective of Morgan Stanley, UBS, and other institutions.Chinese artificial intelligence (AI)Stocks are anticipated to resist a slowdown in various sectors, as the mainland utilizes technology to enhance business efficiency and stimulate economic recovery, as per investors and analysts.
Companies including Meituan and Xiaomiwere expected to gain from an influx of AI adoption that would reshape business strategies, as per Morgan Stanley, with investors seeking new success stories followingDeepSeek's breakthroughIn the field of generative AI technology, China Asset Management, one of the largest mutual fund companies on the mainland, stated last month that the nation's AI implementation—currently at a 5 percent adoption rate—is poised for rapid expansion, akin to the growth of personal computers in the 1980s.
"Artificial intelligence is likely to serve as a major force behind China's modernization," stated Yao Pei, an analyst from Huachuang Securities, in a report released this month. "There are numerous factors driving AI development, and it is anticipated that AI will integrate into every sector," particularly in electronics, computing, and media, Yao mentioned.
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DeepSeek's unexpected rise this year brought China's technology shares back into the public eye, fueling hope that the nation could still take the lead in AI despite U.S. export restrictions. Investors are now spotting fresh opportunities in the sector following their investments in platform-focused developers of large language models likeAlibaba Group Holding and Tencent Holdings. Alibaba holds ownership of the Post.
China's largest online travel agencyTrip.com Group, short-video platform operator Kuaishou Technology and budget e-commerce operator PDD Holdingsinclude companies that are poised to benefit from AI applications, as noted by Morgan Stanley. Additional possible winners are electric vehicle manufacturers.BYD and Nio, as well as a manufacturer of home appliancesMidea Group, it was mentioned in a report in May.
In contrast to the US, which held an advantage in AI computing, China prioritized efficiency—highlighting income derived from AI-driven products and cost reductions resulting from increased productivity, according to the US investment bank.
"A more competitive AI environment is expected, with DeepSeek possibly encouraging rivals like ByteDance, Tencent, Alibaba, and others to lower model costs and integrate AI into their business processes," it stated.
The worldwide AI infrastructure market, valued at $35.4 billion in 2023, is expected to expand at a yearly growth rate of 30 percent between 2024 and 2030, according to Kate Lakin, research director at Putnam Investments in the United States, in a report released last month. She noted that this growth might face temporary interruptions due to shifts in U.S. policies regarding technology exports to China and evolving tariff situations.
The global wealth management division of UBS stated in a report released on Tuesday that the enduring long-term development in artificial intelligence will continue to fuel growth within the technology sector, noting that the effect of American technological restrictions on major Chinese tech companies would be minimal.
"The advanced productive forces exemplified by AI are expected to serve as the key driver in overcoming the 'middle-income trap' and redefining the global economic structure," China Galaxy Securities stated in a report released in June.
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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.
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