When the pick-up in AI was seen in financial markets earlier this year, some observers pointed out that it is not exactly a new technology, as AI in various shapes or forms has been around for decades. Similarly, in their July report, the analysts point out that AI is not entirely new to China’s tech industry. However, there is a greater emphasis on the development of foundational AI in large language models (LLMs) recently.
Although there is no clarity on how artificial intelligence (AI) in China would be monetised, regulated and publicly consumed, Morningstar Equity Research expects Baidu and Alibaba Group Holding to be the key beneficiaries within its coverage in the near term.
Analysts Kai Wang, Chelsey Tam, Dan Baker and Ivan Su believe the two Internet giants can generate incremental revenue to their cloud or advertising businesses from clientele who are willing to pay for generative AI to enhance their existing products as well as improve operating efficiency.
