"The U.S. could account for some 55% (of the growth), but China is likely to be the world's second largest AI market with over 6% share.
Computing power serves as the foundation for AI development and ByteDance, Tencent, Alibaba and Baidu, as a group are the world's second largest buyers of AI chips (12%)," they added.
A key driver will be AI cloud services, they said .
Stock picks CLSA named Baidu , Alibaba and Tencent as the "cheapest AI plays" that will "lead China's AI innovation."
"Alibaba, Baidu and Tencent are trading at only 8.8x, 13.1x and 15.6x 24 [months] adj[usted] P/E (price-to-earnings) which only reflect the value of their traditional businesses.
Persons:
CLSA, Stock, — CNBC's Michael Bloom
Organizations:
Baidu, International Data Corporation, Inspur, Tsinghua University, Hong
Locations:
U.S, China, Hong Kong