In the rapidly evolving landscape of technology, particularly in the realm of artificial intelligence (AI), the advancements in computational power have reached unprecedented heightsRecent reports indicate that by 2024, China is expected to experience an extraordinary growth rate of 74.1% in its smart computing capacity, signaling a robust surge in both technology and economic potential in this sector.

This growth is not merely a statistical boost; it's indicative of a broader transformation being spearheaded by innovation and investment in AIComputational power—often referred to as "computational capability"—is crucially intertwined with the effectiveness of algorithms and machine learning modelsAs the demands for more sophisticated AI applications increase, the infrastructure supporting this development must scale accordingly.

Recent collaborations, like the partnership between Apple and Alibaba related to AI, and the sensational rise of DeepSeek, have captured the attention of investors, emphasizing the critical nature of computational resources in driving technological advancementsHerein lies the crux of the issue: computational power is becoming an essential driver of economic development, particularly as businesses increasingly rely on AI technologies to streamline their operations and innovate their offerings.

A recent evaluation report by International Data Corporation (IDC) and Inspur Information has shed light on China's burgeoning smart computing capacity growth, projecting it to reach an astounding 725.3 quintillion floating-point operations per second (EFLOPS) by 2024. This projection is underscored by a market scale growth to approximately $19 billion, reflecting a staggering year-on-year increase of 86.9%. The rapid evolution of the AI industry serves as a compelling force, propelling the foundations of computing infrastructure, thereby driving high-speed growth in China's computing sector.

The tech landscape is punctuated by revolutionary events that illustrate this dynamic shift

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On January 20, the release of the DeepSeek-R1 large model captivated global interest, showcasing a significant enhancement in how computational resources can be leveraged more effectivelyMeanwhile, developments from xAI with its Grok3 model, which utilizes a massive collection of NVIDIA GPU clusters for training purposes, further amplify the competitive nature of AI technology.

Market analysts from Minsheng Securities argue that the long-term effects of reducing entry barriers and costs associated with AI will likely stimulate rather than stifle total demandThis paradigm shift, wherein all models developed by DeepSeek are open-source, means that developers and companies alike can deploy comparable AI models to some of the best in the business without prohibitive costsAs these models become accessible and deployable at scale, the frequency and volume of their use will inevitably surge—aligning with the economic theory known as the "Jevons Paradox." This concept posits that as technological advances enhance the efficiency of resource use, demand will rise, resulting in an overall increase in resource consumption.

Facebook's founder, Mark Zuckerberg, echoed similar sentiments during a recent earnings call, emphasizing the strategic advantage presented by robust investments in capital expenditures and infrastructureHe articulated the importance of building such infrastructure not merely for enhancing service quality but as a critical component for achieving expected levels of service scalability.

The surge in capital stocks related to computational power has not gone unnoticed, as companies involved in AI hardware, including chips and servers, have seen remarkable gains on the stock marketFor instance, the computational leasing index recently soared nearly 31% post-holiday, underscoring a healthy investor appetiteNotably, stocks involved in the "East Data West Compute" initiative rose by around 24%, while data-centric and server indices surged beyond 20%. The standout performer, Parallel Tech, saw its stock rise dramatically by 200%, affirming its position at the forefront of the A-share market.

In the quest to identify potential beneficiaries in the AI wave, investors are tasked with discerning which companies stand to gain meaningfully as concepts translate into concrete performance metrics

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Companies adept at capturing AI chip opportunities while possessing substantial computational resources and extensive data center operations are poised to seize market advantages.

Deep within this ecosystem, companies like Cambricon-AI are notable for their leadership in manufacturing AI chips, demonstrating technical prowess that positions them favorably in the computing domainTheir products find application across a spectrum of areas, including cloud and edge computing, where demand remains consistently high.

Similarly, Inspur Information stands tall as a leading IT solutions provider in China, with recognized high-performance computing products enjoying a prestigious reputation both domestically and abroadTheir deep-rooted experience in the computational infrastructure domain enables them to capitalize on the burgeoning demand.

Higon Information specializes in designing high-end processors used in servers and workstationsWith products that include general-purpose processors (CPUs) and co-processors (DCUs), Higon is well-situated to meet the needs of an expanding market.

Moreover, the landscape continues to evolve as Capitol Online constructs integrated cloud computing nodes across over ten regions globallyThis positioning allows them to cater to a wide array of applications, from cloud gaming to AI and intelligent manufacturing.

Electronic components company Honxin is making strategic moves by collaborating with chip partners to develop hardware for computational servers and networks, while simultaneously capitalizing on computational leasing opportunities based on client demands across various sectors.

Recent disclosures of computational business figures reveal a notable uptake in computational resource accumulationFor instance, Runjian Co. reported a remarkable 32.82% increase in revenue from its computational network business in the first half of 2024, emphasizing their commitment to establishing themselves as a leader in technology service expertise within this field.

Data centers constitute a fundamental aspect of computational capabilities

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