Summary of Conference Call Notes Industry and Company Involved - The conference call focuses on the TMT (Technology, Media, and Telecommunications) sector, specifically analyzing the computer and media industries. Core Points and Arguments 1. **Industry Outlook**: The analysis indicates a favorable outlook for the computer and media sectors, drawing parallels to the conditions observed in 2019-2020 [1][2][3] 2. **PBRV Framework**: The report utilizes the PBRV (Price-to-Book Ratio and Return on Equity) framework to assess industry performance and make mid-term predictions [2][3] 3. **Historical Performance**: The historical trajectory of PB and ROE for the computer and media sectors is examined, revealing that current valuations are at historical lows, similar to the pre-recovery phase of the telecommunications sector in 2019 [4][5][6] 4. **Valuation Metrics**: As of Q1 2025, the computer sector's ROE is at 1.7, with a PB of 2.6, indicating a low-risk, high-reward investment opportunity [4][5] 5. **Comparative Analysis**: The computer sector's current positioning is compared to the telecommunications sector at the end of 2019, highlighting similarities in market conditions and investor sentiment [5][6] 6. **Media Sector Recovery**: The media sector shows signs of recovery, with Q1 ROE at 3.6 and PB at 2.6, indicating potential for growth [6][7] 7. **Investment Recommendations**: The report suggests that both the computer and media sectors have the potential for a turnaround, supported by improving financial metrics [7][8] 8. **Market Dynamics**: The computer sector is identified as the only underweighted industry in the TMT sector, presenting opportunities for capital inflow as fund managers adjust their portfolios [9][10] 9. **Fund Performance**: A significant number of active public funds are underweight in the computer sector, with a shortfall of approximately 256 billion yuan compared to benchmark allocations [10][11] 10. **Investment Trends**: The report outlines a cyclical pattern in the TMT sector, where valuation improvements typically precede earnings recovery [12][13] 11. **AI Sector Insights**: The AI application sector is highlighted as a growth area, particularly in the computer and media industries, with expectations for significant market movements in the coming years [16][17][18] 12. **Risks Identified**: The telecommunications and electronics sectors face potential risks due to high valuations and crowded positions, which may limit future growth [20][21][22] Other Important but Possibly Overlooked Content 1. **Market Sentiment**: The report emphasizes that current market conditions may not fully reflect the potential of the AI sector, suggesting that earnings may not be the primary concern in the near term [15][17] 2. **Future Events**: A mid-term strategy meeting is scheduled for June 10, where further insights and reports on industry allocations will be shared [23][24] This summary encapsulates the key insights and recommendations from the conference call, providing a comprehensive overview of the current state and future outlook of the TMT sector, particularly focusing on the computer and media industries.

Core Viewpoint - The article discusses the emerging demand for specialized search capabilities designed for AI, highlighting a fundamental shift in search from human-centric products to digital infrastructure that supports AI operations [1][4]. Group 1: Transition of Search - Search is undergoing a transformation to become a foundational infrastructure for AI, similar to how cloud computing supports the internet [1][4]. - AI products like Figma, Cursor, and Notion are evolving from static tools to interactive entities that can engage in dialogue [3][4]. - The integration of search into AI products is at varying stages, with companies like Cursor and Notion still in early development [4][9]. Group 2: New World Demands - The fragmentation of search will occur as each product develops its own specialized search needs, focusing on speed, quality, and the nature of results [6]. - Traditional search engines profit from clicks, while embedded search will generate revenue based on the quality of results provided [7]. - The quality of search retrieval will become a key differentiator, prioritizing recall rates and structured data over ad-filled results [8]. Group 3: Opportunities in Search - Opportunity 1: Providing real-time web search for large language models (LLMs) through optimized search engines like Exa, which focus on enhancing LLM performance [10][11]. - Opportunity 2: Enabling deep research capabilities for humans, surpassing traditional search engines, with tools like OpenAI and Exa's Websets [12]. - Opportunity 3: Offering private data search solutions for enterprises, unlocking knowledge trapped in SaaS platforms, exemplified by Glean's growth [13]. Group 4: Future Predictions - Search APIs are expected to thrive, with valuable search companies operating as invisible infrastructure for new AI applications [14]. - A fragmented search ecosystem will emerge, with numerous winners, while Google is likely to maintain its dominance in consumer search [15]. - The addressable market includes billions of knowledge workers, with pricing models shifting towards subscription-based systems that enhance productivity [16][17].

Group 1 - Google and its parent company Alphabet are focusing on redefining the search experience by transitioning from traditional search to an AI-driven intelligent assistant that anticipates user needs [3][6] - CEO Sundar Pichai emphasized the importance of Google's long-term investments in infrastructure, such as self-developed TPU chips and large-scale data centers, which provide a competitive edge in AI model training and deployment [3][6][13] - The company is exploring the future of human-computer interaction, highlighting the shift towards voice, image, and multimodal inputs that are reshaping hardware and product interfaces [3][18] Group 2 - Pichai addressed concerns about whether Alphabet is still seeking the next billion-dollar business, stating that the focus is on maintaining innovation and leadership in an AI-dominated technology cycle [4][6] - The company has seen significant growth, with quarterly revenue increasing from $20 billion to nearly $100 billion, and is positioned to leverage AI for further opportunities [6][10] - Google is testing a new AI-driven search experience called "AI Mode," which allows for conversational queries and has already seen a significant increase in user engagement [7][9] Group 3 - Pichai noted that Google's infrastructure is designed to provide high performance and cost efficiency, allowing the company to offer advanced AI services at competitive prices [13][14] - The company plans to invest $70 billion in capital expenditures, focusing on servers and data centers to support AI infrastructure and model services [14] - Google is committed to maintaining a dual approach by using both its TPU chips and NVIDIA GPUs for AI tasks, ensuring flexibility and efficiency in its operations [15] Group 4 - The company is actively investing in next-generation hardware, including AR glasses and robotics, to enhance its product offerings and explore new computing platforms [19][25] - Pichai believes that the integration of AI and robotics is approaching a breakthrough, with significant advancements expected in the next few years [27][28] - Google is also focused on building a robust ecosystem for AI, leveraging its existing services like YouTube and Google Cloud to create a comprehensive AI product ecosystem [9][31] Group 5 - Pichai highlighted the importance of energy resources for AI development, acknowledging that power supply limitations are currently affecting Google's cloud computing business [22][24] - The company is exploring various energy solutions, including solar and nuclear power, to address future energy demands for AI [23][24] - Google has a long-term strategy of investing in emerging technologies, such as quantum computing and AI, to ensure sustained growth and innovation [25][26]