China CIO 2H26 Survey: Silver Lining

China's AI market is entering the commercialization phase with strong enterprise adoption intentions. We expect AI investment value to gradually move up along the stacks, from energy, chips, cloud, and model layers, finally to the application layer. Key insights from our AlphaWise 2H26 China CIO Survey: technology upgrade finally becomes China CIOs' top decision factor rather than macro backdrop after four years of rapid AI development, bringing upside to IT budgets; enterprise AI adoption is progressing well, with adoption entering production for a significant portion of enterprises; more AI spending is additive, not substitutive, as companies create new budgets to fund AI initiatives rather than reducing spending elsewhere; growth to rotate from hardware to software after software budgets were squeezed by higher hardware prices in 2026; private AI dominates enterprises' preferences, with most CIOs seeking specific models deployed on private cloud for the long term; DeepSeek's momentu