China's Top Data Centers to Benefit Most From AI Push -- Market Talk

Dow Jones

May 13, 2025

0353 GMT - China's top data centers will benefit the most from its AI push, S&P Global Ratings says in a report. Amid increasing demand for computing power, some leading players plan to double capacity this year to better meet the service needs of big AI spenders like Alibaba and Tencent, it notes. S&P estimates that Alibaba's and Tencent's total spending in this area will ramp up to more than $28 billion in 2025-2026 from about $7 billion in 2023. However, it notes that the benefits of China's AI push won't be distributed evenly across the industry. "For smaller and less competitive players...we see a potential asset bubble," says credit analyst Aras Poon. A potential lack of supply of advanced chips is also a key risk for new data-center demand in China, as it could limit companies' ability to build AI infrastructure, the report adds. (kimberley.kao@wsj.com)

(END) Dow Jones Newswires

May 12, 2025 23:53 ET (03:53 GMT)

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Amid increasing demand for computing power, some leading players plan to double capacity this year to better meet the service needs of big AI spenders like Alibaba and Tencent, it notes. S&amp;P estimates that Alibaba's and Tencent's total spending in this area will ramp up to more than $28 billion in 2025-2026 from about $7 billion in 2023. However, it notes that the benefits of China's AI push won't be distributed evenly across the industry. \"For smaller and less competitive players...we see a potential asset bubble,\" says credit analyst Aras Poon. A potential lack of supply of advanced chips is also a key risk for new data-center demand in China, as it could limit companies' ability to build AI infrastructure, the report adds. 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Amid increasing demand for computing power, some leading players plan to double capacity this year to better meet the service needs of big AI spenders like Alibaba and Tencent, it notes. S&amp;P estimates that Alibaba's and Tencent's total spending in this area will ramp up to more than $28 billion in 2025-2026 from about $7 billion in 2023. However, it notes that the benefits of China's AI push won't be distributed evenly across the industry. \"For smaller and less competitive players...we see a potential asset bubble,\" says credit analyst Aras Poon. A potential lack of supply of advanced chips is also a key risk for new data-center demand in China, as it could limit companies' ability to build AI infrastructure, the report adds. 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Amid increasing demand for computing power, some leading players plan to double capacity this year to better meet the service needs of big AI spenders like Alibaba and Tencent, it notes. S&P estimates that Alibaba's and Tencent's total spending in this area will ramp up to more than $28 billion in 2025-2026 from about $7 billion in 2023. However, it notes that the benefits of China's AI push won't be distributed evenly across the industry. \"For smaller and less competitive players...we see a potential asset bubble,\" says credit analyst Aras Poon. A potential lack of supply of advanced chips is also a key risk for new data-center demand in China, as it could limit companies' ability to build AI infrastructure, the report adds. (kimberley.kao@wsj.com) \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  May 12, 2025 23:53 ET (03:53 GMT)\n\n\n  Copyright (c) 2025 Dow Jones & Company, Inc.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":true,"code":"91000000","status":"200"}}}