CLSA thinks China could emerge as the second-largest artificial intelligence market, and the firm is eyeing a tranche of stocks to play the growth. "While the USA is a strong leader, China is putting up a fight and we believe it will become the world's second-largest AI market with over 6% share of global US$1tn AI spending by 2026," the note said. For exposure to the future AI growth in China, Leung highlighted Baidu and Alibaba , while calling out Tencent as the premier play — a trio of stocks the firm dubbed "BAT." "We believe Baidu, Alibaba and Tencent are the best positioned to lead China's AI innovation," Leung said. All three companies are the dominant developers of large language models in China, Leung added, and already have a tight grip over the necessary data and IT to grow further.

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Persons: CLSA, Elinor Leung, Bard, Leung, Tencent, —, BABA, Michael Bloom Organizations: Nvidia, Microsoft, Google, Baidu, BAT, ", HK Locations: China, The U.S, U.S, ChatGPT, USA, Hong Kong, Tencent