China Next Winners: Powering China's AI Revolution

This report is part of a series on China Next Winners in which we identify the next generation of industries and corporate winners in China. China's AI benefits from a structural cost advantage. Leading Chinese models are often priced at a fraction of comparable US models while maintaining competitive intelligence scores, resulting in attractive intelligence-per-dollar proposition. This advantage is driven by a combination of more efficient model architectures, lower infrastructure costs and cheaper power, allowing Chinese providers to deliver AI inference at materially lower cost. We expect hyperscaler electricity consumption to become one of the fastest growing sources of power demand over the next decade. Driven by rising AI adoption, continued expansion of data center infrastructure and China's ambition to narrow the compute gap with the US, we estimate data center electricity demand could increase from 202TWh in 2025 to 1,476TWh in 2035, representing a 24% CAGR. Cheap, abundant an