China's AI Strategy Seen as Negative for Companies' Tokenization Efforts — Market Talk

Chinese President Xi Jinping's push to position China as a provider of AI as a global public good through open-source models is mildly negative for Chinese technology companies seeking to monetize AI directly through token sales, Morningstar director Ivan Su says. China's strategy of diffusing AI across the Global South depends on keeping its models inexpensive, suggesting low AI costs are a deliberate, long-term policy rather than a temporary effort to gain market share before industry consolidation, Su says. However, Morningstar says the policy is mildly positive for companies focused on AI applications rather than foundation models. It continues to favor Tencent as its top sector pick for the company's emphasis on application-layer businesses such as advertising and gaming instead of token sales. ([email protected])