UBS: Optimistic about China's AI cost advantage, prefers Alibaba (09988), Baidu (09888), Tencent (00700), and Kuaishou (01024).

UBS released a research report stating that by 2026, artificial intelligence agents are expected to achieve large-scale applications, with AI usage scenarios shifting from dialogue to action. However, there is a divergence in application scenarios between the United States and China, with the United States focusing more on enterprise applications and China increasing investment in consumer services. In terms of monetizing enterprise AI, leading global AI labs (such as Anthropic and OpenAI) will focus more on enterprise development and monetization in 2026. It is worth noting that the market share of Chinese AI models (such as MiniMax, Kimi, and GLM) in the emerging agent product OpenClaw has significantly increased. UBS is optimistic about the long-term market share growth of Chinese AI models in the global enterprise API market due to their constantly improving intelligence level and cost advantages. The report points out that major Chinese internet companies launched red envelope activities during the Spring Festival to drive AI product traffic, including Tencent's Yuanbao (1 billion RMB), Alibaba's Tongyi Qianwen (3 billion RMB), Baidu's Wenxin Yiyuan (0.5 billion RMB), etc. UBS believes that this will accelerate the penetration rate of AI, especially among users in lower-tier cities, and promote the use of AI functions such as image and video generation, and real-time commerce. The report mentions a wave of model releases during the Spring Festival, narrowing the gap between the capabilities of these models and those of leading global AI labs. UBS believes that the ongoing disruptive narrative of AI has boosted the investment sentiment of model providers, but investors remain cautious towards vertical platforms and application companies. Apart from recently assigning an initial investment rating to MiniMax (00100), among the internet giants, UBS is optimistic about Alibaba and Baidu's full-stack AI capabilities, as well as the potential of Tencent and Kuaishou (01024) in AI applications.