What is China's "East Data West Computing" strategy?

China's "East Data West Computing" strategy is a national initiative to build massive data centers in western desert regions while keeping the data users primarily in eastern population centers. This approach takes advantage of abundant land, renewable energy potential, and cooler temperatures in western regions while serving the computing needs of the more developed eastern areas. It's a cornerstone of China's plan to become a global AI leader despite international restrictions on technology access.

Why are data centers being built in desert regions?

Desert regions offer several advantages for large-scale data centers: abundant and inexpensive land, potential for renewable energy (particularly solar), and in some cases, cooler night temperatures that help with cooling efficiency. However, these locations also present significant challenges, particularly around cooling and water usage, which creates opportunities for companies specializing in thermal management and energy-efficient cooling technologies.

What are GPUs and why are they important for AI?

GPUs (Graphics Processing Units) are specialized computer chips originally designed for rendering graphics but now essential for AI development. Unlike regular computer processors (CPUs), GPUs can perform many calculations simultaneously, making them ideal for the parallel processing needed in AI workloads. Advanced GPUs from companies like Nvidia have become the fundamental building blocks of AI infrastructure, accelerating tasks like machine learning and deep neural network training by orders of magnitude compared to traditional processors.

How are companies working around US export restrictions on advanced chips?

Companies are using various strategies to work around US export restrictions on advanced chips. These include: stockpiling chips before restrictions take effect, using slightly older chip models that aren't restricted, developing domestic alternatives (though generally less capable than restricted chips), purchasing through third parties or gray markets, and repurposing chips from consumer products. China is also investing heavily in developing its own chip manufacturing capabilities to reduce reliance on foreign technology.

What is "Projected Profit" in the stock data points?

"Projected Profit" refers to a company's estimated future earnings as forecasted by financial analysts. These projections typically reflect expectations about revenue growth, market conditions, expense management, and industry trends. For the companies in this theme, projected profits may be influenced by factors like increasing demand for AI infrastructure components, China's continued investment in data centers, and each company's competitive position within their market segment. These projections help investors evaluate a stock's potential future performance and value.

15 handpicked stocks

China's Desert AI Revolution

This carefully selected group of stocks represents companies providing the essential infrastructure for China's massive AI data center expansion in the desert. Professional analysts have identified these picks as key beneficiaries of China's ambitious AI infrastructure build-out, offering you a strategic way to invest in this technological revolution.

Han Tan | Market Analyst

Updated 2 days ago | Published at जुलाई 14