AI Powers Telecom Stocks Surge

In recent weeks, the explosive growth of artificial intelligence has captivated tech enthusiasts and investors alike, ushering in what some are heralding as a second growth wave for major telecommunications operators in ChinaThe rising demands stimulated by AI are fundamentally altering the landscape of cloud computing and associated industries, leading to remarkable performance in the stock prices of dominant players such as China Telecom, China Unicom, and China Mobile.

On February 21, 2023, a significant surge was observed across the cloud computing supply chain, with notable increases in sectors such as computing power leasing, cloud infrastructure, and specialized chips for AI applicationsMarket observers noted an unparalleled spike in stock performances with China Telecom and China Unicom hitting the trading limit, marking impeccable highs since April 2019. China Mobile also showcased a remarkable rise exceeding 4%, pushing its market capitalization past the 100 billion yuan mark.

This phenomenon is underpinned by Alibaba's noteworthy announcements regarding its capital expenditures—specifically, its ambitious intent to invest heavily in AI infrastructureAlibaba’s strategic shift positions AI at the core of its investment agenda, projecting that in three years, its cloud and AI-related capital expenditures would surpass the totals of the past decadeThis commitment not only aims to elevate AI model development but is also expected to solidify the company’s position as an industry leader while spurring the growth of AI-native applicationsThis push has led external analysts to forecast a significant uptick in revenue generation from Alibaba's cloud segment, further fueled by recent shifts in public cloud and AI cloud market predictions.

HSBC Research has been particularly optimistic, revising its projections concerning Alibaba's cloud revenue growth from the previously expected 12% to an impressive 17% for the 2026 fiscal year

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This enhanced forecast aligns with a broader acknowledgment that both domestic and international markets are engaged in an AI-enabled arms race, thereby accelerating investment in cloud infrastructureThe ongoing developments signify a robust wave of demand for AI technologies as telecom operators gear up to strengthen their cloud capabilities by investing billions in data centers and computing platforms by 2025.

Analysis from Citic Securities highlights this moment as a turning point in the AI infrastructure sector, where existing resources are now being reevaluated, and the prior excesses of the computing era are being repurposedThe stock prices of these major telecoms surged as they decidedly broadened their engagement in burgeoning initiatives like DeepSeek—an advanced tool set aimed at integrating AI across various products and scenarios, effectively crafting a new star on their growth trajectories.

Additionally, these telecom giants are not alone in their drive towards innovative collaborationsThe exploration of deep learning technologies and AI IaaS (Infrastructure as a Service) policies is rapidly emerging as a lucrative business avenue for these companiesAs they expand their services to include support for local hardware and integrated machine solutions, the larger goal appears to be enabling local AI deployments, which are not only cutting-edge but essential for meeting client needs in this dynamically evolving market.

What should be noted is the ongoing enthusiasm stemming from DeepSeek—an open-source AI model that emphasizes collaboration within the tech communityWith a schedule that involves rolling out multiple code repositories in the coming days, DeepSeek is devoted to sharing its latest advancements with broader audiencesThis commitment embodies a fresh perspective on tech development: innovation is not a solitary endeavor but rather a collective journey that thrives on shared knowledge and resourcefulness.

DeepSeek describes itself as a small enterprise, yet its aspirations are far from limited

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