Core Insights - The article emphasizes that the volume of Tokens called is a more accurate reflection of the actual load of large models in the AI cloud market than the scale of GPU computing power [2][6][11] - Volcano Engine has emerged as a significant player in the Chinese AI cloud market, with a revenue target exceeding 20 billion yuan for 2025, following a revenue of over 11 billion yuan in 2024 [2][3][35] - The focus on Token consumption indicates a shift in the cloud computing industry from selling computing power to selling Tokens, which could provide a competitive advantage for Volcano Engine [6][20][36] Market Position - According to IDC reports, Volcano Engine holds a 49.2% market share in the large model public cloud service market for the first half of 2025, up from 46.4% in 2024 [3][6] - In the AI infrastructure market, Volcano Engine ranks third with a 9% market share, and in the generative AI infrastructure market, it ranks second with a 14.2% market share [3] Token Consumption Growth - The Token consumption in China is experiencing rapid growth, with a reported increase of nearly 10 times from June to December 2024 [7][12] - The total Token consumption in the Chinese large model public cloud service market reached 537 trillion times in the first half of 2025 [7] - Volcano Engine's Ark platform saw a year-on-year increase of 3.98 times in Token consumption [7] Strategic Focus - Volcano Engine prioritizes Token consumption over revenue from GPU computing, viewing it as a better indicator of AI industry health and customer engagement [6][9][10] - The company aims to create a virtuous cycle where stronger model capabilities lead to increased AI applications and higher Token consumption [10][21] Future Outlook - Predictions suggest that by the end of 2027, the daily Token consumption of the Doubao model could exceed 100 trillion, marking a growth of at least 100 times from 2024 [18] - The shift from "selling computing power" to "selling Tokens" is seen as a significant evolution in cloud computing technology and business models [20][36] Competitive Landscape - Volcano Engine's strategy mirrors that of Google, which has successfully integrated its AI models with consumer applications to enhance Token consumption and reduce computing costs [22][35] - The company is positioned to leverage its extensive consumer application ecosystem, including Douyin and Doubao, to further increase its market share in Token consumption [34][35]

Core Insights - The development of AI large models in China is being driven by various institutions such as Baidu, Alibaba, ByteDance, and iFlytek, focusing on technical deepening, application expansion, and ecosystem construction [2][3][4] Technical Deepening - Multi-modal integration is a key focus, with institutions like iFlytek and ByteDance enhancing their models to process and respond to various forms of input, including voice, gestures, and emotions, leading to more natural user interactions [2] - Improvement in reasoning capabilities is being pursued, with ByteDance's Doubao 1.6 - thinking achieving top rankings in complex reasoning tests, while Baidu's Wenxin Yiyan enhances knowledge and reasoning accuracy through external knowledge sources [2] Application Expansion - Industry-specific empowerment is being emphasized, with iFlytek's plans to tailor its models for sectors such as automotive, education, healthcare, and smart cities, while Baidu and Alibaba explore applications in finance, industry, and e-commerce [3] - Innovation in intelligent applications is expected, as ByteDance transitions from an app-centric model to an agent-based model, showcasing the potential for AI to reshape software development paradigms and create new applications [3] Ecosystem Construction - Open-source initiatives are becoming a significant trend, with various models being released by institutions like ByteDance and Baidu, which encourages developer participation and enhances model performance [4] - The establishment of a robust industrial ecosystem is crucial, supported by government policies and local initiatives, such as Shanghai's comprehensive AI industrial chain, which integrates computing power, data, algorithms, and applications [4]