The United States may be imposing restrictions on China to curb its dominance in artificial intelligence, but China is determined to press forward regardless. Two of the largest tech giants in the country, Tencent and Baidu, reveal some of the business methods that they are using to keep up in the AI race.
According to the companies, stockpiling chips, making AI models more efficient, and using homegrown semiconductors are some methods that are helping them keep up. The US President may have abolished a Biden-era rule related to chip exports, but it also restricted exports of some semiconductors from names such as Nvidia and AMD.
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Nevertheless, history has shown how these rules have been futile, with DeepSeek and similar models from China creating havoc in the tech world.
Martin Lau, president of Tencent, has revealed that his company has a “pretty strong stockpile” of chips that the company previously purchased. Lau noted that, contrary to popular belief, the company has been able to achieve good training results with only a small group of chips.
“That actually sort of helped us to look at our existing inventory of high-end chips and say, we should have enough high-end chips to continue our training of models for a few more generations going forward,” Lau said.
Lau further noted that they are looking into using smaller models that don’t need such large computing power. They are also able to use custom-designed chips and semiconductors currently available in China.
Meanwhile, the Chinese internet services company is using “full-stack” capabilities, a combination of its cloud computing infrastructure, AI models, and the actual applications based on those models, such as its ERNIE chatbot, to keep up.
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10. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: 23
On May 27, RBC Capital’s analyst Matthew Hedberg maintained their “Sector Perform” rating on Informatica Inc. (NYSE:INFA) and raised its price target to $22.00 from the previous target of $19.00. Informatica is a leader in enterprise AI-powered cloud data management.
Analyst Matthew Hedberg cited Friday’s Bloomberg report of takeover interest by Salesforce (CRM), noting that Informatica could be an attractive asset given key fundamental drivers. This includes the ongoing growth in data, the ongoing cloud mix-shift, and potential GenAI tailwinds.
The very same day, the news of Salesforce and Informatica agreeing for the former to acquire the latter for approximately $8 billion in equity value was confirmed on the respective companies’ newsrooms. The acquisition is expected to boost Salesforce’s artificial intelligence capabilities and give access to Informatica’s data management tools.
“Together, Salesforce and Informatica will create the most complete, agent-ready data platform in the industry. By uniting the power of Data Cloud, MuleSoft, and Tableau with Informatica’s industry-leading, advanced data management capabilities, we will enable autonomous agents to deliver smarter, safer, and more scalable outcomes for every company, and significantly strengthen our position in the $150 billion-plus enterprise data market.”
-Marc Benioff, Chair and CEO of Salesforce.
9. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 63
On May 27, Citi reaffirmed its Buy rating for Dell Technologies Inc. (NYSE:DELL) and set a price target of $128. Dell Technologies provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
The firm has introduced an optimistic 90-day short-term outlook for Dell shares. The optimism is because the firm sees an improving GB200 demand profile, “showing a marked improvement.” Moreover, a leading Dell supplier has pointed out an improvement in GB200 NVL72 ramp beginning in May. This improvement is expected to contribute to a projected 50% year-over-year growth in Dell’s artificial intelligence server revenues in 2025.
Overall, the firm views upside for Dell shares ahead of earnings this week, with improved demand for Nvidia’s GB200 AI super chip, which Dell uses.
“We open a ST [short term] Upside View on DELL shares on improving GB200 demand profile, showing a marked improvement.”
Hedge Fund Resource Center