Original title: AI Investment Mirroring: Institutions scramble to investigate and debate, bubble fluctuates
Reporter Jiang Shiyi reports from Beijing
"We are actively seeking investment opportunities in the 'AI + Finance' sector. The financial industry has complete data, fast result feedback, strong willingness to pay, and low psychological barriers to adopting new technologies, which makes AI application faster here," said a partner at a private equity firm in Shanghai on September 25, speaking to a reporter from 21st Century Business Herald.
Since artificial intelligence was included in the government work report in March this year, the concept has gained significant momentum. The capital market has been even more excited by this emerging technology. Whether in the equity or securities markets, AI has captured the attention of investors.
Institutional Research Intensifies
"From a sector perspective, AI is currently developing in areas like visual recognition, which are widely applied. For example, in the security field," said Xiangyang, an AI analyst at the CCID Research Institute under the Ministry of Industry and Information Technology, in an interview with 21st Century Business Herald reporters.
Looking at 34 AI-related companies listed on the A-share market, Hikvision (002415.SZ), which specializes in visual identification, leads in this year's interim performance, with a net profit of 3.276 billion yuan, ranking second. Donghua Software (002065.SZ) saw its profits surge more than fivefold. This performance boom has made many AI concept stocks popular among institutional investors.
Taking Hikvision, one of the leading AI stocks, as an example, interim data shows that 431 funds hold the company. The largest shareholder is the East Hong Ruihua Shanghai Hong Kong Deep Mixed Fund, holding 18.7959 million shares, or 0.2% of the total. Compared to 122 in the first quarter, the number of open-end funds increased by 253%. Recent institutional investor survey data shows that 85 institutions investigated Hikvision between July 25 and September 8. They are focused on AI product applications, growth sustainability, and other key issues.
According to incomplete statistics from 21st Century Business Herald reporters, since September alone, brokerages such as Huarong, Huatai, and Changjiang have issued a total of 57 AI-related research reports, with keywords like "AI chips" and "autonomous driving" appearing frequently. "In addition to AI chips, there are few companies involved in this area in China, so there is still room for development," Xiangyang admitted. In early September, Huawei announced the Kirin 970 chip at the IFA Berlin International Consumer Electronics Show. This chip features the world’s first mobile terminal processor with a dedicated NPU for AI, and it was used in the new Mate10. Its release significantly boosted market enthusiasm.
Bubble Debate
Although AI has been hot in the investment world, according to 21st Century Business Herald, different investment institutions have varying logic when it comes to AI investments. "Currently, the difference in investment logic between the primary and secondary markets mainly lies in how projects are evaluated. For secondary market investments, alternative targets are more certain, and industry judgments can be diluted. The focus is on the company itself, so secondary market investors care more about whether the company can gain a higher market share in a highly predictable environment and build a competitive moat," said a source from a Beijing-based private equity firm.
For the primary market, the same source added, capital is more interested in the company's future potential—whether it can create a new market.
"But the driving force behind this round of AI hype still revolves around three factors: algorithms, computing power, and data. Investors screen projects based on these three criteria, so both first- and second-tier investors are aligned in their investment direction," the source noted.
Reporters found that current AI preferences among equity investment institutions are concentrated in the finance, healthcare, and transportation sectors.
However, given that many companies in the AI space are still in the early stages of development, and performance remains uncertain, there are growing voices in the market suggesting that current AI investment is showing a "bubble" trend.
"There must be a bubble, especially in the primary market. From an investment standpoint, we can only say that the AI bubble isn’t more obvious than in other industries because the current primary market environment is quite different from previous ones," said the Beijing official. "When we invest, we consider whether the bubble has reached an unacceptable level, but I don’t think it has yet."
Xiangyang was candid: "Relatively speaking, people may feel that the expected value is higher than actual output, but bubbles can actually help drive industrial development." (Editor: Ronald)
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