Big tech companies in China have doubled spending on infrastructure and the development of artificial intelligence (AI) technologies, despite restrictive US measures to limit China's technological progress, the Financial Times (FT) newspaper reported.
Alibaba, Tencent and Baidu's combined capital expenditure in the first half of the year was 50 billion yuan (US$7 billion), compared with 23 billion yuan (US$3.23 billion) for the same period in 2023 d. According to representatives of technology groups, “the main focus is on the purchase of processors and infrastructure related to the training of large language models for AI“, the publication notes.
Revenues from AI-related products will more than double by 2023, according to Alibaba. This surge is partly due to investment in Chinese AI startups.
As Alibaba CEO Eddie Wu previously told investors, the company will “continue to invest in AI capital research and development to drive growth in its AI-powered cloud business .“
At the same time, as the FT notes, China's capital spending in major technology industries still lags significantly behind that of American companies. Alphabet, Amazon, Meta (a recognized extremist organization in the Russian Federation) and Microsoft spent $106 billion in the first half of the year, promising to continue investing in the coming months.
In October 2022, US authorities adopted a set of measures aimed at curbing China's technological progress by restricting supplies of advanced chips and related equipment. According to Bloomberg, which cited a report by the New York Federal Reserve, Washington's tightening of export sanctions has reduced the market value of American companies by $130 billion. The document says the establishment of tougher trade barriers shows the failure of US efforts to counter China's semiconductor development.
According to Chen Wenling, a senior economist at the China Center for International Economic Affairs (CCIEE), restrictive measures by the US authorities on the supply of some types of the latest microcircuits and equipment for their production in China have hurt the economy of USA, stimulating the development of relevant Chinese industries.