China’s server, chipmakers enter ‘super cycle’ as AI computing capacity mushrooms
China’s AI hardware-related companies have become the new darlings for Chinese onshore stock investors
China’s domestic server and chipmakers are entering a “super cycle” as the country’s local governments spend lavishly on computing infrastructure to support artificial intelligence development.
The AI Computing Power Concept Index, compiled by Chinese financial data provider Wind and comprising 54 component stocks, hit a record high on Monday, with an increase of 166 per cent over the past 52 weeks.
The frenzy was stoked by DeepSeek’s hint last week that it has changed its data format to support domestic AI chips.
At the annual China Computing Power Conference that concluded on Sunday, the Chinese government announced that the country would boost its AI computing capacity by 40 per cent this year.
As a result, China’s AI hardware-related companies have become the new darlings for Chinese onshore stock investors because most of the new orders are expected to flow into the hands of local suppliers amid Beijing’s tech self-sufficiency and network security push.
One of the best performers has been Cambricon Technologies, whose stock price has increased 460 per cent over the past 12 months on the belief it can be an alternative to US AI chip giant Nvidia.
Shenzhen Envicool Technology, which makes cooling systems for data centres, saw its share price skyrocket 322.5 per cent in the past year while Zhongji Innolight, a maker of transceiver modules for computing centres, has gained 180 per cent over the same period.
Other winners include chip company Hygon Information Technology with a share price gain of 181 per cent over the past year and supercomputer maker Dawning Information Industry with a 155 per cent increase.
The surge comes as the Chinese government is quickly building up the nation’s computing infrastructure. China’s expanding national supercomputing network comprises more than 30 supercomputing centres across the country serving 648,000 clients.
In addition, China’s privately owned tech giants have invested heavily in the sector. In June, Huawei Technologies secured deals with state-owned telecoms operator China Mobile to supply switches for its newly built data centres over the next two years.
TikTok owner ByteDance, the most valuable start-up in China, was expected to double its capital expenditure this year to 160 billion yuan (US$22 billion), with roughly 90 billion yuan for AI computing, according to a report by Zheshang Securities in December.
South China Morning Post owner Alibaba Group Holding set aside a record 380 billion yuan to advance its AI and cloud infrastructure over the next three years, while Tencent Holdings doubled its capital expenditure in the first half to more than 46 billion yuan, with nearly half of that supporting “AI-related initiatives”, the company said in its latest financial report.
The expansion had previously been driven by imported hardware and chips, but that is changing amid US export controls and Beijing’s desire to cut reliance on foreign technology.
In 2022 and 2023, Nvidia accounted for at least 85 per cent of AI accelerator cards in China’s data centres, according to IDC China vice-president Zhou Zhengang, who was quoted by Chinese media outlet China Business News in May.
However, Nvidia’s share dropped to 65 per cent last year, and Zhou expected local accelerator card producers to account for more than 40 per cent of shipments in the first half of this year. “In a very short time, domestic [companies] will become mainstream, accounting for over 50 per cent of the market,” Zhou was quoted as saying.
Alibaba, Baidu lead China’s AI cloud boom as market surges 55% to US$2.7 billion
The top two players each held roughly 25 per cent of the 2024 market, followed by Tencent and Huawei, IDC says
Baidu and Alibaba Group Holding led the market for public cloud services supporting artificial intelligence in China last year, as the industry embraced “disruptive innovations” towards generative and agentic AI, according to consultancy IDC.
The mainland AI public cloud market reached 19.6 billion yuan (US$2.7 billion) in 2024, increasing 55 per cent on the back of surging demand for AI training and applications, IDC said on Monday.
The top two market players each accounted for roughly 25 per cent of the market, followed by Tencent Holdings and Huawei Technologies, according to a chart that did not provide exact share numbers. Alibaba owns the Post.
China’s DJI launches first robot cleaner with drone-level obstacle avoidance system
The product is covered by the government’s 15 per cent subsidy for electronics, with an additional discount of US$42 offered by DJI
The new Romo series is a combination vacuum cleaner and mopping robot. Equipped with binocular fish-eye vision sensors and three wide-angle lidars, the machine can avoid thin items like playing cards and cables thicker than 2mm, according to a post on DJI’s WeChat account on Wednesday.
The unit has a battery life of three hours, enabling it to clean an area of roughly 178 square metres (1,916 sq ft) and can be fully charged in 2.5 hours. It can operate in environments of between 0 and 40 degrees Celsius.
The cleaner, with a built-in water tank with a capacity of 164 millilitres, can adjust the water volume and automatically add more when encountering excess dirt. The mop will automatically lift when it encounters a carpet.
Users can connect to the cleaner remotely using a phone, which allows them to see what’s happening, like a security camera function, as well being able to talk to family members at home.
The new product comes in three models, with the most expensive Romo P featuring a see-through outer shell for the cleaner and dock, while the cheapest Romo S has a white cover for both.
