Orient Securities·2025-04-14 10:23Investment Rating - The report maintains a "Positive" investment rating for the media industry in China [5]. Core Insights - The AI new cycle is expected to drive the continuous advancement of the computing power-algorithm-application ecosystem, leading to increased investment in the Hong Kong internet sector. Key recommendations include Alibaba-W (09988, Buy), Kuaishou-W (01024, Buy), and Tencent Holdings (00700, Buy) [3]. Summary by Sections AI Industry Dynamics - Alibaba Cloud's AI Empowerment Conference highlighted significant growth in AI demand, with API call volumes increasing nearly 100 times year-on-year and enterprise connections rising from over 100 to nearly 10,000 [12]. - The report notes that Alibaba's foundational models have achieved industry-leading status in both reasoning and multimodal capabilities, with the QwQ-32B model demonstrating near Deepseek R1 reasoning capabilities on consumer-grade GPUs [15][19]. - The open-source ecosystem is thriving, with Alibaba's Tongyi Qianwen series being the largest and most comprehensive globally, boasting over 100,000 derivative models [20]. AI Applications and Market Trends - The report indicates that AI applications are rapidly penetrating various sectors, with a notable increase in the number of active customers and products on Alibaba Cloud [12]. - The 2025 AI Trends Report from Stanford reveals that AI model performance is nearing or exceeding human levels, with significant reductions in inference costs, enhancing AI application penetration rates [41][56]. - The report also highlights the competitive landscape, with domestic models like Alibaba's Qwen-2.5-VL-32B ranking fifth globally in visual reasoning models, showcasing strong performance against larger models [32][34]. Technological Developments - Google has launched the seventh-generation TPU chip, Ironwood, which boasts a peak performance of 4614 Tflops, significantly enhancing AI inference capabilities [29][30]. - The introduction of the A2A protocol by Google and the MCP protocol by Alibaba Cloud aims to standardize communication between AI agents, enhancing interoperability and efficiency [36][40]. Investment Recommendations - The report suggests increasing exposure to the Hong Kong internet sector, particularly in companies positioned at the forefront of the AI industry, such as Alibaba, Kuaishou, and Tencent [3].