China’s tech giants to lead AI growth despite chip challenge: JPMorgan

China’s internet giants are poised to drive the continued adoption of artificial intelligence in the country, with AI chip shortages unlikely to pose significant obstacles for the sector in the short term, according to JPMorgan analysts.

Sustained user adoption of AI features would be a key theme in the coming year despite the absence of “clear evidence” of AI monetisation in China, said Alex Yao, co-head of Asia-Pacific technology, media and telecoms equity research, in a briefing on Friday.

While China’s Big Tech firms are seeing their chatbot apps – such as Tencent Holdings’ Yuanbao and ByteDance’s Doubao – gain traction, Yao said those services remained relatively minor by mobile internet standards.

He expected companies like Tencent and Alibaba Group Holding to focus on integrating AI features into their established “killer apps”, such as messaging platform WeChat and the online marketplace Taobao. Alibaba owns the Post.

Such efforts would generate “a lot of token consumption”, which would boost revenues for cloud service vendors and benefit downstream sectors, including servers and random-access memory, Yao said.

Tokens are the fundamental units of text that AI models process. AI service providers often charge users based on the amount of tokens consumed.

  

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