China Galaxy Securities: Significant potential in volume and price, optimistic about the development prospects of AI tools

According to the Zhitong Finance APP, China Galaxy Securities released a research report stating that domestic AI tools, leveraging the user base accumulated in the early stages and the continuously improving penetration rate, are expected to achieve sustained commercial value growth amid technological iterations and market expansion, becoming an important force in the global AI application market. With the continuous iteration of underlying large model capabilities, current AI applications have initially established a technological foundation for development. The ongoing exploration of AI across various industries will have transformative impacts on most sectors. Notably, the acceleration of B-end commercialization is particularly evident in the media sector, where it has been observed that overseas AI technology started earlier and has relatively mature commercial applications, providing certain insights for domestic application investments.

Key points from China Galaxy Securities:

Review of the US AI Market: Driven by multiple resonances at the macro, technical, application, performance, and funding levels, the upward trend in the US artificial intelligence industry in 2024 is quite evident, showing significant excess returns against the Nasdaq index: As of July 16, 2025, the US AI sector has risen by 80.19% since the beginning of 2024, while the Nasdaq index has increased by 38.47% during the same period. Against the backdrop of the Nasdaq index reaching a historical high in July, the AI sector still shows significant excess returns relative to the index.

Accelerating Domestic Production and Building an AI Development Closed-loop Ecosystem: The uncertainty of international situations such as tariffs may hinder cooperation in the AI field between China and the US to some extent in the short term. However, from a long-term perspective, China is expected to build a more complete industrial chain and accelerate the process of independent innovation (such as chips and basic software).

1. Revolution in Computing Efficiency: The reduction in model inference costs led by DeepSeek will drive AI from being "data center exclusive" to "terminal inclusive," breaking the overseas blockade on cutting-edge computing power.

2. Policy Drivers and Application Scenario Advantages: China has the world's largest application market, and with massive end-user participation, the development of the AI ecosystem is expected to form a triangular closed loop of "technology-talent-users."

Significant Potential in Volume and Price, Optimistic about the Development Prospects of AI Tools: Currently, domestic AI tools are rapidly capturing the market with low-price strategies, cultivating user habits. This "low-cost customer acquisition—function optimization—value upgrade" path aligns with the common development logic of internet products, providing the possibility for long-term profitability. The large population base and digital demand in China provide fertile ground for AI tools. As AI technology becomes more widespread, more users will shift from basic functions to advanced AI applications, further enhancing penetration rates. The firm believes that domestic AI tools, leveraging the user base accumulated in the early stages and the continuously improving penetration rate, are expected to achieve sustained commercial value growth amid technological iterations and market expansion, becoming an important force in the global AI application market.

Risk Warning: Risks related to policy and regulatory environments, risks of AI technology development falling short of expectations, and risks of AI application implementation not meeting expectations