The AI sector continues to surge, with major developments emerging across both hardware and applications. XPeng's humanoid robot, IRON, has become a symbolic "Turing test" for robotics, sparking widespread discussion in tech circles. Meanwhile, XPeng's Hong Kong-listed shares have significantly outperformed peers NIO and Li Auto this year, buoyed by AI advancements.
**AI Hardware: High-End Computing and CPO Take Center Stage** The AI hardware segment is being driven by breakthroughs in high-performance computing and optical modules. Alibaba Group CEO Eddie Wu recently announced plans to build a large-scale AI infrastructure and super AI cloud, offering global developers cutting-edge services. In the U.S., Oak Ridge National Laboratory is collaborating with AMD on two supercomputers—"Lux" and "Discovery"—with a $1 billion budget, leveraging AMD’s AI chips for nuclear modeling and quantum computing research.
Demand for optical modules is exploding, with 800G modules now essential for data centers. By 2025, global demand is projected to reach 18–21 million units, while 1.6T modules are entering small-scale production. Nvidia’s GTC conference reinforced this trend, with its $500 billion Blackwell-Rubin roadmap boosting confidence in 1.6T modules. Leading suppliers like InnoLight and Eoptolink are poised for over 70% net profit growth in Q3 2025.
**AI Applications: Vertical Expansion Accelerates** AI adoption is skyrocketing, with OpenAI reporting 1 million enterprise users globally. China’s generative AI user base doubled in six months to 515 million by June 2025 (36.5% penetration). Applications span brain-controlled wheelchairs, multilingual AI screens, and smart connected vehicles, showcased at events like the World Internet Conference and upcoming World Computing Congress.
**Catalysts for Domestic AI Growth** 1. **Technological Breakthroughs**: Domestic AI is transitioning from hype to execution, with local firms adopting homegrown chips for large-model training. 2025 marks the commercialization of AI Agents, shifting AI from tools to core productivity. 2. **Earnings Validation**: The STAR AI ETF (589520) saw 20 of 30 holdings turn profitable in Q3, with Cambricon’s net profit surging 321% YoY. 3. **Policy Support**: China’s latest Five-Year Plan prioritizes "technological self-reliance," including an "AI+" initiative for long-term sector backing. 4. **Geopolitical Pressures**: Analysts highlight AI and localization as safe-haven themes amid global tech tensions, accelerating domestic supply chains.
**ETF Spotlight** - **ChiNext AI ETF (159363)**: Focused on hardware (optical modules, chips, edge computing), it holds top performers like InnoLight (+137.9% net profit) and Eoptolink (+312.3%). - **STAR AI ETF (589520)**: Broader exposure to chips, algorithms, and hardware. While volatile (-6.16% YTD), it offers long-term potential, with Cambricon turning profitable and Kingsoft Office growing 35.4% on AI-driven demand.
Despite valuation concerns, strong Q3 earnings suggest AI’s "industrial revolution" narrative remains intact.
*Data sourced from public markets; not investment advice. Risks apply.*