China's AI Dragons Risk Choking Each Other
It's a story that has played out many times in the history of China's tech sector. Notoriously fierce competition means that whenever a new craze comes along, scores of rivals emerge ready to pounce.
Firms are then locked in a race to the bottom when it comes to pricing. The food delivery wars forced out smaller players over the years and led bubble tea — another consumer fad fallen prey — to be sold this month for as little as 1.68 yuan (less than 25 cents). A similar cutthroat market has left behind a trail of zombie cars in the electric-vehicle sector. Now the same forces are in full swing in the booming artificial intelligence industry.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fast Company
24 minutes ago
- Fast Company
Nvidia stock price hits fresh record high as analyst sees ‘golden wave' of Gen AI adoption
Shares of Nvidia Corp (Nasdaq: NVDA) reached a new record high on Thursday in premarket trading. As of the time of writing, the stock had peaked at $156.99 before slightly sliding to $156.68. The uptick follows Wednesday's all-time high closing price of $154.31, which rose to $154.59 in after-hours trading. DeepSeek and tariffs worried investors earlier this year Nvidia has been a de facto representative of AI investment in the market. It reached a high of $153.13 in early January, but its shares soon tumbled alongside China's success with AI company DeepSeek and uncertainty around tariffs. DeepSeek used Nvidia chips to build its AI systems despite the United States banning their sale to China. The stock hit a low of $86.62 on April 7, just five days after President Trump's 'Liberation Day,' on which he announced a series of tariffs worldwide. But now, at nearly double that price, it has recovered its losses—and signaled a renewed investment in AI. However, it comes as the dollar hits a three-year low after reports that Trump will move up his selection of a new Federal Reserve chair, the Wall Street Journal reports. What's fueling Nvidia's recent rally? The chipmaker's current ascension was fueled in part by Loop Capital's decision yesterday to raise its price target from $175 to $250. 'Our work suggests we are entering the next 'Golden Wave' of Gen AI adoption, and NVDA is at the front-end of another material leg of stronger than anticipated demand,' Loop Capital analyst Ananda Baruah stated in a client note, according to Reuters. Helped along by Nvidia's 4% rise on Wednesday, the Nasdaq composite also neared its record high with a 0.3% increase.
Bloomberg
24 minutes ago
- Bloomberg
China Credit ETFs to Almost Double as Funds Rush to Tech Bonds
The number of corporate bond exchange-traded funds in China is set to almost double to 21 as a growing number of money managers draw up strategies to invest in the fledgling tech-related bond market. Ten Chinese firms including E Fund Management Co., China Southern Asset Management Co. and Invesco Great Wall Fund Management Co., have submitted applications to the securities regulator to set up ETFs that will invest in notes that fund technology businesses, state media reported last week. Brokerage Huaxi Securities Co. says there are currently 11 corporate bond ETFs in China.
Yahoo
24 minutes ago
- Yahoo
Is UK data centre development demand sustainable?
Deloitte partner for AI and data, Clare Mortimar, has spent her entire career helping governments figure out how to extract value from their data. 'And during that time when could you imagine the Prime Minister talking about data centres?' she says addressing an audience at London's AI Summit 2025. Today, AI is driving the conversation around data centres. "I've been waiting for this all my life,' says Mortimar only half in jest. The sheer development speed of AI, unlike any other historical technology shift, has created an exponential requirement for compute power. And this has seen data centres become a hot topic for policy-makers courting investment from AI developers and hyperscalers. GlobalData forecasts that revenues from data centre services (including application hosting and colocation services) will reach $125bn worldwide by the end of 2025, with a compound annual growth rate of 8.75% for the period 2023-2028. According to the research and analysis company, investment in data centres globally has surged since 2023 driven by digitalisation and AI, and is set to accelerate even more rapidly in 2025. At the UK's International Investment Summit in October 2024, CyrusOne, ServiceNow, and CoreWeave collectively announced UK data center infrastructure investments totaling £6.3bn. The investment reinforces the UK government's move to classified data centres as Critical National Infrastructure which provides the industry with enhanced government support and security status, encouraging further investment But despite high levels of investment, GlobalData construction economist Nicolas Psaroudis says that the timelines to build data centres, typically spanning two to four years, could mean supply will not keep pace with demand. 'Today, AI workloads are more power-intensive than ever, with global data centre energy demand expected to more than triple in the next five years,' says Psaroudis, noting that ensuring sustainable, scalable data centre development will be essential not only to fuel AI's potential but also to manage the substantial energy footprint that comes with it. But addressing exponential demand for compute power sustainably is a growing pain point for the UK data centre industry. 'This is a very controversial conversation, because people don't always agree,' says Danny Quinn, managing director of Scottish data centre company DataVita. 'Some of the world's leading scientists really are quite firm about the fact they're [data centres] going to do so much good for the world, that actually, on balance, this isn't going to be a bad thing,' says Quinn. The key sustainability issues, when it comes to AI, are carbon and water. 'There is nothing more you can do to impact sustainability than where your data center is located. Everything else falters into comparison,' says Quinn. 'But you still have data centres in places like India where fossil fuels are being used more. It's not all renewable energy, despite how big tech companies want to pitch how good their work is,' he adds. Quinn's home country of Scotland is a renewable energy hub. For every kilowatt of power, Scotland generates roughly 30 grams of CO2. 'If you move that to London, it's 300 grams of CO2 for the exact same data center, for the exact same load. And it doesn't matter if someone says they're using green energy, that's paperwork in the background. It's not the reality,' notes Quinn. 'If you move it to somewhere like Poland, it's 800 grams of CO2. Yet, some of the largest technology companies are still deploying massive developments into these locations,' he adds. Why are they doing that? Put simply, because it's cheap. Quinn sees a real obligation for businesses to stop green washing, and to start making procurement decisions that are not based on financial metrics alone. Then there is water. By 2027, the OECD projects that AI will require 4.2–6.6bn m³ per year. This is more water than the entire annual use for a country like Denmark, or nearly half that of the UK. Again, location can be a mitigating factor. 'In cooler climates, you can use drier chillers, which run in technological closed loops, so you don't have to refill the water. So that cuts the water usage by about 100 times,' says Quinn. The conundrum for policymakers with sustainability goals in the UK and US, for example, is giving the private sector enough leeway for global competitiveness in AI while addressing the knock-on effect of the carbon emissions this creates. 'We've got some very clear net zero goals, a sustainability agenda that we all are passionate about for our future, and they're diametrically opposed [to AI development],' says Quinn. Senior vice president and managing director of Hewlett Packard Enterprise for the UK, Ireland, Middle East and Africa, Matt Harris, says data centre development should be approached from a whole life cycle perspective, from data centre location to building methods. 'The positive thing is that there is a huge amount of innovation happening in this space,' he adds. Harris notes that UK data centres, built over several decades do not use liquid cooling which can be up to 90% more energy efficient. 'We have to think about deploying at scale when it comes to infrastructure design. There's innovation coming around cooling technologies, some really neat startups re-utilising heat that is created in the process to heat a local swimming pool, for example," he says. Data centre developer Datum opened a new 24,000 ft² data centre, MCR2, in Manchester in June. Stephen Lorimer, VP of Professional Services for Salute, the company that designed and built the data centre, says that despite the budgets committed to AI development including the government's latest promise of £2bn in public funds, infrastructure need to scale with AI investment. 'But at the moment it isn't,' he adds. If infrastructure is left as an afterthought, the gap could become a national vulnerability, warns Lorimer. 'The government talks about AI breakthroughs, but rarely divulges the power, cooling and land needed to support them,' he says. 'More broadly, it's also clear the UK lacks a coordinated national strategy for this digital infrastructure, unlike some of our global peers. If we don't act, the UK could become a net importer of compute power, outsourcing both innovation and control to more established countries,' says Lorimer. It's clear that the data centre industry needs policy support. Addressing challenges around planning delays and uncertainty in the sector around energy availability are sure to slow down the development of new UK data centres. It remains to be seen whether policy will keep apace with the UK's new and unprecedented infrastructure demand. "Is UK data centre development demand sustainable?" was originally created and published by Verdict, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
