Since the launch of China’s DeepSeek AI chatbot in January, the country’s cloud computing and AI sectors have rapidly evolved. Goldman Sachs Research predicts a 25% increase in power demand from China’s data centers this year, necessitating a focus on home-grown AI chips. Leading Chinese AI firms are expected to invest over $70 billion in 2024, aiming to expand domestic and international markets. With electricity capacity for data centers projected to rise 30% to 30 gigawatts, infrastructure growth resembles that of the US post-ChatGPT. Furthermore, while Chinese users typically rely on free software models, AI hyperscalers are tapping into “post-training” and “inference” revenue streams for enterprises. Current monetizable uses for AI include video generation and picture editing, where subscription models are prevalent. As the sector matures, tracking annual recurring revenue (ARR) will be crucial for growth analysis, especially as international markets contribute increasingly to revenue.
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