Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: The report centers on the AI industry in China, particularly advancements in AI chips, data centers, public clouds, and software applications. It highlights the expected growth of AI as a new driver for various industries over the next 5-10 years [1][2][3]. AI Chips - **Market Growth**: The AI accelerator market in China is projected to grow from **US$18.5 billion in 2024** to **US$78 billion in 2027**, representing a **CAGR of 61%**. Key drivers include high demand from hyper-scalers like Alibaba and supportive government policies [2][14]. - **Localization Rate**: The localization rate of AI accelerators in China is expected to rise from **43% in 2024** to **83% in 2027** [2][15]. Data Centers - **Capacity Growth**: China's total data center capacity is forecasted to grow from **4.2 GW in 2017** to **22.0 GW in 2024**, with a **CAGR of 27%**. Total server capital expenditure is expected to reach **RMB 518 billion in 2027** [3][23]. - **Demand Dynamics**: The total data center demand is projected to increase to **27.1 GW by 2027**, with an expected **25% CAGR** from 2024 to 2027. The utilization rate is anticipated to improve from **64% in 2024** to **67% in 2027** [3][24][25]. AI Models and Applications - **User Adoption**: In 2024, **249 million users** (17.7% of the population) in China are expected to utilize generative AI tools, primarily for Q&A and text processing [4][42]. - **Market Expansion**: The GenAI software market is projected to grow at a **40% CAGR**, reaching **US$9.8 billion by 2029** [4][48]. Key Stock Picks - **Semiconductors**: Companies like Montage and Horizon Robotics are highlighted for their roles in AI chip production [5][53]. - **Data Centers**: VNET and GDS are identified as leading data center operators benefiting from the AI demand [5][53]. - **Software**: Kingdee, Meitu, and Kingsoft Corp are noted for their AI-driven software solutions [5][53]. - **Public Cloud**: Alibaba and Kingsoft Cloud are expected to leverage AI for growth in cloud services [5][54]. Additional Insights - **AI Infrastructure Investment**: Alibaba is committing **RMB 380 billion** over three years to enhance its AI capabilities across various sectors [54][56]. - **Competitive Landscape**: Domestic AI chip manufacturers are narrowing the performance gap with global leaders like Nvidia, indicating a competitive shift in the market [21][38]. - **Emerging Opportunities**: New hardware developments, such as AI glasses and toys, are seen as potential growth areas, although they are still in early stages [42]. Conclusion The report emphasizes the rapid advancements and growth potential within China's AI sector, driven by increasing demand for AI technologies across various industries, significant investments in infrastructure, and a competitive landscape that is evolving quickly.

Core Viewpoint - The article highlights an upcoming event organized by Sky9 Capital and Z Potentials aimed at fostering connections among entrepreneurs, researchers, and investors in AI-powered applications, emphasizing the importance of networking and sharing insights in cutting-edge technology fields [5][6]. Group 1: Event Details - The event, titled "Builders Night," is scheduled for September 12 from 6 PM to 10 PM in San Francisco [3]. - Attendees will have the opportunity to network with AI founders, venture capital investors, and fellow innovators, as well as gain insights into trends in various technology sectors such as agents, models, robotics, and biotechnology [6]. Group 2: Community Engagement - Z Potentials is actively recruiting new interns and creative entrepreneurs from the post-2000 generation, indicating a focus on engaging younger talent in the entrepreneurial ecosystem [11]. - The organization encourages individuals to join their public community and participate in discussions, with opportunities for selected contributors to become signed authors and early co-creation members [12].

Core Viewpoint - The resignation of C3.ai's CEO, Tom Siebel, has led to a significant decline in the company's stock price, raising questions about the future direction of the business and potential investment opportunities [2][5][10] Company Overview - C3.ai was founded in 2009 by Tom Siebel and has developed over 130 turnkey AI applications across various industries [5] - In the most recent fiscal year ending April 30, the company reported revenue of $389 million, reflecting a 54% increase over the past three years [5] Stock Performance - Following the announcement of Siebel's resignation, C3.ai's stock closed at $23.19, down more than 20% from the previous day [2] - The stock has experienced a decline of over 75% since going public in late 2020 [5] - C3.ai's stock is down over 30% this year, leading to speculation about whether it represents a buying opportunity [9] Financial Health - Despite revenue growth, C3.ai has not reached breakeven, with a net loss of $289 million in the most recent fiscal year, which is a 50% increase in losses over three years [8] - The company needs a new CEO focused on cost-cutting and improving margins to regain investor confidence [7][8] Leadership Transition - The search for a new CEO has commenced, with the company engaging an unnamed "internationally renowned search firm" for the process [4] - The lack of a succession plan has created uncertainty among investors regarding the company's leadership and future direction [4] Market Sentiment - There is a mix of hope and skepticism surrounding C3.ai, as investors are eager for growth in the AI sector but remain cautious due to the company's financial performance [6][10] - The departure of Siebel adds uncertainty, but the company is not necessarily in a worse position than it was previously [10]

Financial Data and Key Metrics Changes - The company reported third quarter sales of $4.5 billion, representing a 14% increase year-over-year and exceeding guidance [6][8] - Adjusted earnings per share (EPS) reached a record $2.27, a 19% increase compared to the previous year [6][8] - Adjusted operating margins improved to 20%, up 60 basis points from the prior year [7][8] - Free cash flow generation was $1 billion for the quarter, contributing to a year-to-date total of approximately $2.1 billion [5][19] Business Line Data and Key Metrics Changes - The Industrial segment experienced over 20% organic growth, driven by Digital Data Networks and Energy businesses [6][8] - The Transportation segment saw a 2% organic growth in the auto business, with a notable 11% growth in Asia, offset by a 5% decline in Western regions [10][11] - The Energy business grew 70%, including contributions from the Richards acquisition, with a 20% organic growth rate [12][13] Market Data and Key Metrics Changes - Orders in the Transportation segment increased by 5% year-over-year, with a 17% growth in Asia [9] - The Industrial segment orders grew by 12% year-over-year, reflecting strong momentum in AI applications and energy sectors [9][12] - The global auto market remains uneven, with strength in Asia helping to offset declines in Europe and North America [9][10] Company Strategy and Development Direction - The company is focused on capitalizing on strong demand for AI and energy applications, with significant investments made to broaden its business portfolio [4][5] - A strategic emphasis on localization has resulted in over 70% of production being localized, enhancing customer differentiation [5][6] - The company plans to hold an Investor Day to discuss growth opportunities and value creation [3] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong performance into the fourth quarter, expecting double-digit sales and adjusted EPS growth [6][8] - The company anticipates that the strong demand trends in AI and energy will persist, contributing to future growth [45][46] - Management noted that while there are challenges in Western markets, the overall outlook remains positive due to strong performance in Asia [9][10] Other Important Information - The company returned $1.5 billion to shareholders and deployed $2.6 billion for acquisitions in the Industrial segment [8][19] - The impact of tariffs was approximately 1.5% of sales, with minimal earnings impact, and the company continues to mitigate these through sourcing changes and pricing actions [18][19] Q&A Session Summary Question: Is the AI business fully ramped and scaled? - Management confirmed that AI revenue is expected to exceed $800 million this year, with continued growth anticipated into next year [22][24] Question: What is driving the diversification and growth in the industrial segment? - Management highlighted investments in connectivity and power trends as key drivers of growth, with margins in the industrial segment now exceeding 20% [30][32] Question: Is there any meaningful impact from customers pre-buying to mitigate tariff risk? - Management indicated that there is no significant evidence of pull-ins affecting orders, with growth seen across both segments [38][40] Question: What is the outlook for margins moving forward? - Management expects to maintain margins above 20% in the industrial segment, supported by operational improvements and volume leverage [105][108] Question: How is the company positioned for future acquisitions? - Management expressed confidence in the acquisition pipeline, focusing on bolt-on opportunities to strengthen the energy business [96][98]

Core Insights - NVIDIA Corporation's data center GPUs for AI tasks have significantly boosted its business, while C3.ai's AI applications have attracted a diverse client base, raising questions about C3.ai's potential to rival NVIDIA and whether its stock is a viable investment opportunity [1] Group 1: C3.ai's Business Performance - C3.ai has secured a contract increase with the U.S. Air Force, raising the limit to $450 million from $100 million, indicating strong demand for its AI solutions [1][2] - In fiscal year 2025, federal government contracts accounted for approximately 26% of C3.ai's bookings, highlighting its reliance on government contracts [2] - C3.ai's revenues for FY 2025 reached $389.1 million, a 25% increase from the previous year, with projections for FY 2026 suggesting sales between $447.5 million and $484.5 million [3][8] Group 2: Partnerships and Market Position - Partnerships with Microsoft and Alphabet are expected to enhance C3.ai's growth and profitability, positioning it as a leading AI application on Azure and Google Cloud services [4][8] - Despite revenue growth, C3.ai has not yet turned a profit, reporting a net loss of $288.7 million in FY 2025, which may hinder its stock performance [5] Group 3: Comparison with NVIDIA - NVIDIA's net income for the first quarter of fiscal 2026 increased by 26% to $18.8 billion, showcasing its profitability compared to C3.ai [6] - NVIDIA has a higher net profit margin of 51.7% compared to the semiconductor industry's 49.5%, indicating its strong market position and potential for further growth [6] - NVIDIA's stock is expected to outperform C3.ai's due to its stronger profitability and market position, with shares reaching a record high of $154.31 [10] Group 4: Investment Considerations - C3.ai maintains a healthy cash reserve and a strong financial position, with assets significantly exceeding liabilities, making it an attractive investment despite not replicating NVIDIA's rapid growth [11][12]

Core Insights - C3.ai, Inc. is positioned to benefit from the ongoing AI infrastructure boom, focusing on delivering practical AI applications for various business challenges [1][4] - The company achieved a 25% year-over-year revenue growth in fiscal 2025, supported by strong partnerships and adoption across sectors such as manufacturing, defense, and life sciences [2][11] - A significant portion of C3.ai's bookings, 73%, came from partners in Q4 fiscal 2025, with a remarkable 419% year-over-year increase in partner-supported deals [3][11] Company Performance - C3.ai has deployed over 130 AI applications and is engaged in more than 600 joint account efforts with Microsoft [2][11] - The company’s strategy emphasizes that enterprise value is realized through actionable AI deployment rather than just hardware or model development [4] - The ability to execute consistently and accelerate deal conversions is crucial for C3.ai to leverage the AI infrastructure boom for substantial growth [5] Competitive Landscape - C3.ai competes with Palantir Technologies and Snowflake Inc., both of which are also targeting the growing demand for AI applications [6] - Palantir has shifted focus to commercial AI, leveraging its existing government contracts and client relationships [7] - Snowflake is evolving into a full AI-data platform, integrating AI into enterprise workflows through acquisitions and new product offerings [8] Financial Metrics - C3.ai's shares have increased by 8% over the past three months, outperforming the industry growth of 5% [9] - The company is currently priced at a forward 12-month price-to-sales ratio of 6.7, which is below the industry average [13] - The Zacks Consensus Estimate for fiscal 2026 loss per share has improved to 37 cents from a previous estimate of 47 cents [15]

7 June 2025 | 4:17AM SGT Asian Equity Perspectives Asian Equity Perspectives: Emphasizing idiosyncrasy - leaning into Korea, toning up Taiwan Timothy Moe, CFA +65-6889-1199 | timothy.moe@gs.com Goldman Sachs (Singapore) Pte Alvin So, CFA +852-2978-1585 | alvin.so@gs.com Goldman Sachs (Asia) L.L.C. Kinger Lau, CFA +852-2978-1224 | kinger.lau@gs.com Goldman Sachs (Asia) L.L.C. Sunil Koul +44(20)7051-4931 | sunil.koul@gs.com Goldman Sachs International John Kwon +65-6654-6337 | jongmin.kwon@gs.com Goldman Sach ...

Group 1 - Meta Platforms is increasing its capital expenditure guidance to $64-72 billion for eFY25, focusing on AI application development to enhance business and consumer engagement [1] - The company's growth strategy emphasizes the advancement of AI technologies as a key driver for future performance [1] Group 2 - Michael Del Monte, a buy-side equity analyst, has over 5 years of experience in the investment management industry and previously worked in various sectors including oil and gas, industrials, and information technology [1]

Investment Rating - The report maintains a Cautious industry view for China's IT Services and Software sector [8]. Core Insights - The software industry in China is expected to continue its downtrend, with the bottom yet to be reached [2]. - AI adoption is identified as the sole bright spot, with increasing interest from CIOs leading to larger budgets and tighter timelines for implementation [5][10]. Summary by Sections Industry Overview - Enterprise confidence is struggling to recover, with CIOs' confidence sinking further due to macroeconomic conditions and the impact of tariffs [4][10]. - IT services budgets are stabilizing, while software budgets are deteriorating, indicating a shift in spending priorities [10]. AI Adoption - There is a significant rise in CIO interest in AI, with 71% expecting AI projects to represent a substantial portion of their IT investments in 2025, up from 52% in the previous survey [11][60]. - AI is cannibalizing traditional IT spending, with hardware and IT services gaining budget share at the expense of software [5][14]. Budget Expectations - The 2025 IT budget growth expectation is 5.8%, down from previous projections, with software growth expected to be 4.2% [12][21]. - SOEs are revising down their IT budgets for 2025, while POEs are expected to see a slight increase [42]. Vendor Insights - DeepSeek is recognized as having the best AI product suite, with a significant majority of CIOs favoring it over competitors [82]. - The preference for AI model development vendors has increased, indicating a shift away from traditional hyper-scaler cloud vendors [90]. Spending Trends - The average percentage of IT spending related to AI is projected to rise to 11.2% in 2025, reflecting a growing commitment to AI initiatives [60][75]. - CIOs expect AI to add an average of 4.5% to their IT budgets in 2025, with a notable portion of this funding coming from reallocations within existing budgets [75][79].

Group 1 - UnitedHealth Group is increasing its use of artificial intelligence (AI) across its business, with 1,000 AI applications in production utilized in insurance, health delivery, and pharmacy divisions [1][2] - The company employs AI for various functions, including transcribing clinician visit conversations, summarizing data, processing claims, and managing customer-facing chatbots, with approximately 20,000 engineers using AI for software development [2] - Half of the AI applications utilize generative AI, while the other half use traditional AI technology, as stated by Chief Digital and Technology Officer Sandeep Dadlani [2] Group 2 - The push into AI comes amid increased scrutiny of UnitedHealth and the healthcare industry, particularly following the tragic death of CEO Brian Thompson and ongoing investigations by the Department of Justice regarding billing practices [3] - Legal challenges have arisen concerning the company's AI initiatives, including a class action lawsuit alleging the use of a flawed AI algorithm to deny claims, with a federal judge allowing the lawsuit to proceed while dismissing some counts [4] - The use of chatbots in healthcare has raised debates about their effectiveness and reliability, with experts noting that while they can provide accurate answers when trained on quality datasets, they may struggle with complex queries [5][6]