China's tech giants make AI investment boom despite US sanctions
(MENAFN) China’s major technology companies have significantly increased their capital expenditures this year, continuing their aggressive investment in artificial intelligence (AI) infrastructure despite ongoing US sanctions designed to limit the country’s advancements in this crucial sector. In the first half of 2024, leading tech firms Alibaba, Tencent, and Baidu collectively invested 50 billion yuan (approximately USD7 billion) in AI development, a substantial increase from the 23 billion yuan spent during the same period last year. This surge in investment is primarily directed towards acquiring processors and building infrastructure necessary for training both proprietary and third-party large language AI models.
ByteDance, the parent company of TikTok, has also intensified its AI-related spending, buoyed by over USD50 billion in available cash and its private status, which shields it from intense investor scrutiny. Alibaba’s CEO, Eddie Wu, highlighted the company’s ongoing commitment to research and development, emphasizing that the company’s capital investments are driven by overwhelming customer demand for AI-based cloud services that currently exceeds supply. Alibaba is investing in processors for its Tongye AI model series and offering computing power for lease to other firms. In the first half of the year, Alibaba’s capital spending soared to 23 billion yuan, reflecting a 123 percent increase compared to the previous year.
Wu further explained that once new servers are operational, they are quickly utilized to their full capacity, leading to a projected high return on investment in the coming quarters. The company’s cloud services saw a 6 percent increase in sales compared to the previous year, and revenue from AI-related products more than doubled, underscoring the growing importance and demand for AI technologies in China’s tech sector.
MENAFN02092024000045015682ID1108626720
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.