First Read: China Internet Sector "What are US investors asking about..."

Research evidence excerpt

First Read: China Internet Sector "What are US investors asking about..."

Global Research

2 July 2026ab

First Read

EquitiesChina Internet Sector

What are US investors asking about China's AI China

models Internet Services

Wei Xiong

Analyst

wei.xiong@ubs.com

High interest in China's models amid shift towards token optimization +86-21-3866 8883

Following our recent note on cost efficiency of China's AI models, we met 40+ investors Kenneth Fong

in the US with a balanced mix of LOs and HFs. As enterprises become cost conscious and Analyst

start to optimize token spend by considering Chinese models as an option (Figure 1LMTokenExpenditureIndex and kenneth-kc.fong@ubs.com

Figure 2ChinavsUSAImodeltokenusagetrendonOpenRouter), we observe better-than-expected investor interest in Chinese AI labs, in order +852-3712 3890

to understand their relative market positioning and competitive dynamics, as well as to Charles Chen

gauge the implications for the AI tech supply chain and global foundation model Analyst

industry. Notably, Zhipu’s recent launch of GLM-5.2 has been well received by the global S1460524020001

tech community, leading more investors to believe Chinese models have reached the charles-za.chen@ubs.com

capability threshold to handle complex, enterprise-grade workloads. DeepSeek, Kimi, +86-21-3866 8907

Alibaba Qwen and MiniMax also see improving recognition. Despite China's relative

strength in multi-modality, this area remains less discussed than AI coding.

Key investor debates and our views

Cost efficiency / token UE: Investors are keen to understand the key drivers behind

China models' cost efficiency and whether it can sustain. Many question whether

Chinese labs need to step up R&D significantly to continue scaling up parameters and