According to a new analysis by Goldman Sachs, artificial intelligence (AI) is no longer a unified global investment theme but is instead forming two distinct ecosystems centered on the US and China. This development is driven by geopolitical balances, national security requirements, and the diverging developmental priorities of the two superpowers.
The Emergence of the Chinese Ecosystem
The bank's strategists, led by Kinger Lau, note that China is no longer confined to the role of an equipment supplier. Instead, it is seeking to create a complete value chain including advanced semiconductors, large language models (such as DeepSeek and Kimi), and physical-world applications.
Despite the fact that China remains generations behind in cutting-edge semiconductor technology, Goldman Sachs estimates that the gap is narrowing. In sectors such as infrastructure, bio-engineering, and aerospace, China may already be on par with or even ahead of its international competitors.
Market Metrics and Investment Strategy
The momentum of the Chinese AI sector is reflected in the following data:
- Nearly $5 trillion in market value has been created since the beginning of 2025.
- AI stocks now represent 42% of the total market capitalization in mainland China and Hong Kong (up from 24% in 2024).
- Their share of trading volume has surged to 57%.
Goldman Sachs now categorizes Chinese AI stocks into two groups: export-oriented firms, which follow international trends, and domestic-focused companies, supported by state initiatives and internal adoption. Export-oriented firms saw a 126% rise by June 2026 before a 23% correction, while domestic firms showed greater resilience.
