Investment Rating - The report indicates an "Outperform" rating for the industry, expecting a relative benchmark increase of over 10% in the next 12-18 months [22]. Core Insights - The easing of US-China compute tensions is signaled by NVIDIA's CEO, highlighting the global recognition of Chinese AI models, which may lead to a rebalancing in the AI supply chain [2][3]. - The introduction of the H20 chip is expected to catalyze the scaling of China's AI inference industry, benefiting domestic cloud service providers and model deployment companies [4]. - The acknowledgment of Chinese open-source models by NVIDIA could enhance international resource allocation towards China's AI ecosystem, reducing reliance on proprietary APIs from US companies [3]. Summary by Sections Industry Overview - Chinese AI models are rapidly advancing to a world-class level, with significant contributions from companies like DeepSeek, Alibaba, Tencent, and Baichuan [1]. - The US is showing signs of relaxing export restrictions on certain AI chips, which may alleviate China's computing power constraints [2]. Technological Developments - The H20 chip, while not as powerful as the H100, offers inference capabilities comparable to the A100, making it suitable for various AI applications [4]. - The report emphasizes the importance of open-source models in breaking technological barriers and fostering international collaboration [3]. Market Implications - The anticipated reduction in inference service costs from 20 yuan per thousand tokens to below 10 yuan will facilitate broader deployment of AI applications across sectors like healthcare and finance [4]. - Companies like Inspur, StarRing Technology, and Yukun Data are positioned to benefit from the H20 server compatibility, enhancing their market competitiveness [4]. Strategic Positioning - NVIDIA's approach of positioning itself as a technology bridge rather than engaging in geopolitical conflicts is seen as a strategy to retain core customers in China [5]. - The report suggests that Chinese AI companies with open strategies will play a more significant role in future standard-setting and international cooperation [3].