Best of China: three Chinese AI stocks leading the pack

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Make China Great Again?
BABA, XPEV & 0992
Are Chinese stocks for you?

If that’s enough to make China great again, read on…

AI Collision 💥

We’ve written about and highlighted a lot of American companies in the last couple of years. But a lot of AI development does happen around the world. But one area we’ve probably neglected a little is China.

But let’s face facts, China is also an AI powerhouse, maybe they even become the powerhouse of our AI future. America might be trying their best to become the AI superpower of the world (they are in pole position) but you can’t write off China’s tenacity and ability to get things done, at scale, at more efficient cost.

With that in mind, what are some of the better Chinese companies, that you can invest in, deeply involved in the AI arms race (and seem to be doing pretty well from it).

1. Alibaba (NYSE:BABA)

Alibaba has significantly advanced its AI chops, particularly through the development of its “Qwen” family of large language models (LLMs).

In November 2024, the company unveiled QwQ-32B-Preview, a 32.5 billion parameter AI reasoning model that challenges existing models like OpenAI’s o1 series.

In addition to model development, Alibaba has committed over $50 billion to AI and cloud computing investments over the next three years. This mass of funding aims to boost its AI infrastructure and cloud services. It is fat becoming China’s premier AI infrastructure company, and while it’s previously been likened as the “Amazon of China” the move into AI and infrastructure only amplifies this.

Their Chairman, Joe Tsai is also focused heavily on their AI future. In a recent post on South Morning China Post, Tsai wrote,

The AI race is no longer about who has the smartest “children”. Innovations to train and operate models more efficiently tell us the value of making the “smartest” AI in a vacuum will eventually approach zero.

In the future, developers will think about real-world applications that drive economic impact. This will accelerate the proliferation of task-specific and specialist AI models and agents.

The stock price has been on boost mode too as they’ve made their AI ambitions more public. This is certainly one of China’s best AI companies to wrap your head around.

2. XPENG (XPEV)

XPENG, is a massive Chinese electric vehicle (EV) manufacturer. But they’re not stopping at EVs. And arguably they won’t even really be considered a car company soon enough.

That’s because XPENG is integrating AI and robotics into its product lineup. Yes it’s an uncanny likeness to Tesla, but also…so what.

If Alibaba is “China’s Amazon” then XPENG is “China’s Tesla”. And I think that’s great.

As I’ve said before, I think humanoid robotics is going to be a big theme in 2025, and XPENG is at the front of things.

In November 2024, XPENG unveiled its humanoid robot, Iron, standing 5’8″ tall and weighing 154 pounds, equipped with over 60 joints offering 200 degrees of freedom.

Iron is currently used in XPENG’s production lines, assisting in assembling the upcoming P7+ model.

Beyond robotics, XPENG is advancing its self-driving car tech through its XPILOT system, which employs a combination of lidar, radar, and cameras to enhance driver assistance.

This all fits in with Chinese policymakers’ push for the “Made in China 2025” plan to accelerate technological advancements in robotics, AI, EVs and this puts XPENG at the forefront of everything China has to offer.

This is also reflected in its stock price. While it’s the “Tesla of China” its stock price is certainly not tracking the same as Tesla! Can it contniue the trend? Possibly. And that makes it another Chinese tech player to keep close watch of.

3. Lenovo Group (0992:HKG)

Ok, so Lenovo is a little harder to invest in, as it’s listed in Hong Kong. But if you can, this consumer technology giant is also becoming a major player and competitor in the AI infrastructure space with their dedicated AI server technologies.

Just a week ago, Lenovo unveiled the ThinkEdge SE100, an entry-level AI inferencing server. This is aimed squarely at small to medium-sized businesses.

As Lenovo puts it,

Lenovo continues to deliver on its mission of enabling smarter AI for all by making implementation feasible for every business, in every industry with infrastructure that goes beyond traditional data center architecture to bring AI to the data.

Lenovo’s commitment to AI at the edge is something they’ve been working on for a while. In November 2024, Lenovo announced a collaboration with Nvidia to develop AI solutions for smart cities.

Additionally, Lenovo has incorporated AMD’s edge-targeted EPYC 8004-series processors into its ThinkEdge platforms. This advantage of being able to work with the two biggest and best AI chip makers, puts Lenovo in a unique position to target their slice of the business market with AI infrastructure, without the multi-billion dollar datacentres that the giants of American AI are building.

While Lenovo isn’t exactly a stand out performer, they’re consistent, profitable and deepening their involvement in our AI future. Definitely one to keep an eye on.

In short, America is a very important part of our future AI story. But it’s not the be all and end all of it.

Opportunities will present themselves everywhere, and we can’t discount what’s coming out of China.

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