AI

A new CLSA report published on Monday has drawn fresh attention to China's rapidly evolving artificial intelligence (AI) sector, stating that Chinese AI models are quickly narrowing the performance gap with leading global models while gaining strong global market share through cost efficiency.

Chinese experts said the report underscores a broader consensus forming in the market: China's AI sector is no longer being judged only by whether it can match US frontier models on raw benchmarks. 

Instead, investors are increasingly focused on whether Chinese companies can deliver competitive performance at much lower cost, and whether they can turn that into scalable commercial adoption.

According to the report published by CLSA, a wholly owned subsidiary of CITIC Securities, agentic AI is moving from laboratory trials into enterprise workflows and emerging as the next infrastructure layer for the digital economy.

Agentic AI - a system that can perform tasks, coordinate workflows, and interact with tools with less human intervention - is becoming a foundational layer for the next phase of AI adoption.

The CLSA report said Chinese AI enterprises are shifting away from focusing solely on model capability and are now paying more attention to performance, deployment flexibility, and total cost of ownership.

The report also noted a growing trend toward multi-model adoption, as enterprises increasingly combine different models depending on use case, cost, and performance requirements. 

In this environment, hyperscale cloud providers that operate across the chip, model, compute, and application layers are expected to be especially well positioned.

The CLSA report predicted that this rising AI adoption could fuel what it called a new global cloud supercycle, with the global public cloud market expected to double to $2.3 trillion by 2028, creating more than $1 trillion in annual revenue opportunities.

In CLSA's assessment, China's AI developers are becoming more competitive not just in model quality, but also in practical deployment, Tian Feng, former dean of SenseTime's Intelligence Industry Research Institute, told the Global Times on Monday. The focus is shifting from top benchmark scores to who can deploy high-performance AI cheaply and at scale.

Chinese AI models are seen as having several advantages: lower training and inference costs, fast iteration and productization, strong engineering capacity, as well as integrated deployment ecosystems, Tian noted.

Market research firm Gartner predicted that half of corporations worldwide will adopt Chinese AI within two years. The adoption rate of Chinese AI models among global corporations will surge from 5 percent in 2025 to 50 percent by 2027, Gartner said in its August report.

However, experts caution that China's AI momentum should not be interpreted as a clear lead over global rivals just yet. While Chinese models are improving quickly and benefiting from lower costs, they still face challenges in frontier research, advanced semiconductor access, and global trust around data governance.