Illustration: Tang Tengfei/GT

Investor enthusiasm for artificial intelligence (AI) has driven substantial gains in the stock prices of AI-related companies on the Chinese market in 2024. Following a notable rally on Friday, the sector saw a modest pullback of 0.24 percent on Monday, closing at 1,117.11 points - nearly double its year-to-date low of 564.65 in February. When viewed over a longer horizon, this surge not only reflects the sector's impressive recovery but also highlights the sustained investor confidence underpinning its growth.

The AI application sector in China's stock market has been booming, with some stocks hitting their daily limit and securities firms placing increasing focus on the area, financial news portal stcn.com reported. A study from Dongguan Securities forecasts that breakthroughs in large-scale multimodal models will enhance content production efficiency and drive AI applications across gaming, film and advertising, potentially fueling a new wave of growth in the sector, the report added.

The sustained rise in stock prices within the AI application sector, coupled with heightened attention from securities firms, underscores strong investor confidence in the long-term growth prospects of the AI industry and reflects the capital market's optimistic outlook for China's AI sector. This optimism is underpinned by several key factors, including robust market demand, accelerating technological innovation, and supportive dynamics in the capital markets.

Currently, the development paths of AI industries in China and various developed countries show distinct characteristics. In some advanced economies, much of the focus is on technological research and theoretical breakthroughs, with notable strengths in areas such as semiconductors. In contrast, China's advantages lie more in the large-scale implementation and commercialization of AI across a wide range of sectors. 

The country has demonstrated a remarkable ability to quickly translate AI innovations into practical applications. At this critical juncture, China's AI industry is transitioning from the lab to the market, producing an increasing number of cutting-edge products, such as humanoid robots, smart voice systems and autonomous vehicles. With its vast data resources and strong market demand, China is emerging as an important player in the practical applications of AI, outpacing some other nations in terms of real-world impact and deployment.

Chinese companies have made significant strides in the commercialization of AI technologies, particularly in areas such as innovation, cost efficiency and market adaptability. For example, several of China's leading tech firms have made noteworthy progress in fields like speech recognition, image processing and natural language processing, contributing to the country's growing involvement in AI development.

Moreover, the highly competitive domestic market has driven Chinese companies to optimize costs, helping them achieve efficiencies that are difficult to ignore. This cost advantage has enabled the deployment of AI solutions across a range of industries, particularly in sectors such as smart hardware, cloud computing and data processing. By reducing production and operational costs, these companies have been able to bring AI technologies to market more quickly, which has supported their wider adoption.

In addition to technological and cost advantages, Chinese firms have demonstrated considerable agility in responding to changing market conditions. They are often able to adjust their research and development priorities and business strategies to stay aligned with the fast-evolving demands of the market. This adaptability has been particularly noticeable in emerging sectors such as autonomous driving, smart healthcare and AI-powered customer service. As a result, Chinese companies are contributing to the ongoing digital transformation of traditional industries and are gradually establishing themselves as important players in the global AI landscape.

The development of AI applications depends not only on technological breakthroughs by individual companies but, more importantly, on coordinated efforts across the entire value chain. China's AI industry has gradually shifted from a fragmented, point-by-point development model to a more integrated focus on the commercialization of its industrial ecosystem, steadily building a more cohesive framework. This shift is evident in the collective rise of AI stocks in the Chinese stock market in 2024, signaling the industry's growing maturity.

The rapid growth of China's AI sector is increasingly recognized as an important factor in the country's economic transformation, while also offering potential benefits to the global economy. Whether in industrial upgrading, technological innovation, financial services and logistics optimization, or addressing global challenges such as climate change and public health, China's AI industry is making a growing contribution. By advancing technological capabilities and fostering international collaboration, the development of AI in China is likely to create new opportunities and contribute to global economic growth, digital transformation, and sustainable development.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn