Fang Jincong, head of internet industry research at UBS China, pointed out in his latest opinion that in a context where it is still unclear how AI will change information discovery, content, and enterprise workflows, hyperscale cloud vendors use capital equivalent to about a year's core cash flow for infrastructure investment, and application-driven platforms invest through R&D expenses, which are more flexible. Therefore, valuation discussions should distinguish between temporary investments, recurring participation costs, and permanent business changes, while the current market overvalues AI spending burdens and underestimates potential upside opportunities. He also said that there are three structural changes that will shape the industry pattern in the AI era, namely capital, efficiency, and ecosystems. This is beneficial to leading Internet platforms with sufficient capital, full-stack capabilities, and mature customer touchpoints and scenario information, while also leaving opportunities for independent laboratories with differentiated technology or specialized advantages.

Fang Jincong, head of internet industry research at UBS China, pointed out in his latest opinion that in a context where it is still unclear how AI will change information discovery, content, and enterprise workflows, hyperscale cloud vendors use capital equivalent to about a year's core cash flow for infrastructure investment, and application-driven platforms invest through R&D expenses, which are more flexible. Therefore, valuation discussions should distinguish between temporary investments, recurring participation costs, and permanent business changes, while the current market overvalues AI spending burdens and underestimates potential upside opportunities. He also said that there are three structural changes that will shape the industry pattern in the AI era, namely capital, efficiency, and ecosystems. This is beneficial to leading Internet platforms with sufficient capital, full-stack capabilities, and mature customer touchpoints and scenario information, while also leaving opportunities for independent laboratories with differentiated technology or specialized advantages.