Since its release in late 2022, OpenAI’s ChatGPT has captured the imagination of the world’s consumers and businesses alike. This latest advancement in generative AI technology is fast raising investors’ expectations to create new business models, as per asset manager Global X. And the US-based ETF specialist believes that Artificial intelligence (AI) in China, although fledgling, can provide lucrative opportunities for investments.

For the uninitiated, generative AI is the term used to describe artificial intelligence systems that are intended to produce original works of writing, photographs, music, computer code etc.

“US-based tech companies have largely dominated the conversation around generative AI thus far, but that could change as Chinese heavyweights like Baidu enter the fray. China appears well positioned to benefit from the AI trend…” said the research team.

As per an insight published by Global X, China’s phenomenal growth in internet platforms, and its huge engineering talent pool combined with its government releasing supportive policy guidelines to foster investments in AI-related fields makes it an attractive avenue for investors. 

“Baidu, which runs China’s most popular internet search engine, is positioned to be one of the leaders in generative AI in China… Besides Baidu, other technology companies like ByteDance, Alibaba, and Tencent also have the potential, and have shown ambition,” claims the asset manager.

The asset manager goes on to explain that the development of generative AI could in turn help improve the overall monetization and pricing opportunities for Baidu, Alibaba, and Tencent’s cloud services.

Additionally, the infrastructure investment required for generative artificial intelligence in China could benefit the country’s semiconductor industries, says Global X. According to the asset manager companies that provide design services and integrated circuits will also be positively affected by this trend. 

“Massive amounts of data, a skilled workforce, government support, and an advanced manufacturing base all augur well for the long-term development of China’s AI capabilities,” concludes the asset manager.

View the full insight here.