Li Yaozhu, equity investment director and general manager of the international business department at GF Fund, said the core difference between overseas neocloud providers and cloud service providers (CSPs) lies in how they measure investment returns and where their competitive edge in computing power construction comes from.

Neocloud providers focus on rapid deployment and centralized delivery of computing capacity, supporting data center construction through diversified funding such as equity and debt, Li noted during a panel discussion at the AI Investment Summit in Beijing on September 16. In contrast, CSPs prioritize the return on computing investment for their overall business, using a combination of internal cash flow and external financing to drive infrastructure expansion, the fund manager said.

Leading CSPs have extended their competitive advantages by developing proprietary ASIC chips, enabling vertical integration across computing silicon, communication systems, and software stacks, which lowers inference costs, according to Li. Combined with declining costs for open-source models, the improving economics of AI applications should push more use cases from pilot projects to large-scale deployment, he said.

Li argued that, assuming the Jevons paradox holds, the increased inference workload generated by wider adoption and higher call volumes will exceed the savings from improved efficiency, ultimately driving sustained growth in total computing demand.

The significant investment opportunity in China's domestic AI computing construction stems from the system complexity created by hybrid deployments and rapid iteration, he emphasized. Domestic and overseas computing cards have different demand characteristics. One advantage of domestic neocloud providers is their access to overseas computing cards, but procurement ratios are restricted, meaning actual clusters often need to deploy both domestic and overseas hardware simultaneously, Li said.

As a result, compatibility, system adaptation, and coordination between different hardware components become especially critical, the manager added. With faster iteration cycles for domestic cards, system design must also anticipate integration of next-generation hardware and upgrades in advance, leaving room for future expansion and architecture evolution, he explained.

China's computing infrastructure must simultaneously address heterogeneous hardware adaptation and continuous iteration, making the complexity of system integration potentially higher than overseas. This complexity translates into stronger requirements for power supply, cooling, and high-speed interconnectivity, creating opportunities for vendors with system-level solution capabilities, Li said.

From an investment perspective, he highlighted liquid cooling, power systems, and high-speed interconnect as key areas worth close attention, stressing the importance of identifying companies that can grow their per-cluster value as computing systems continue to upgrade.