Exclusive: Chinese technology company ByteDance is in talks with Shanghai-based Iluvatar CoreX to purchase AI chips for inference work and is also considering a similar deal with Baidu

Leverage is rapidly unwinding across Chinese stocks: Margin debt on the Shanghai and Shenzhen exchanges fell -2.8% on Friday, or -$11.7 billion, to $405 billion, the largest daily decline since January 2016. This also marks the 4th consecutive daily decrease, totaling -$36.9 billion. This comes as the Star 50 Index, which tracks Chinese technology stocks, plunged -7.1% on Friday, its 2nd-largest daily drop this year, while the CSI 300 fell -3.6%. Memory chip stocks were at the center of the selloff after attracting the highest levels of margin borrowing. As a result, their sharp selloff triggered margin calls, forcing investors to sell and accelerating the broader market decline. Chip stocks have become a global amplifier of market volatility.

Brazil's Itaipu hydroelectric plant is getting a green upgrade. Chinese technology and equipment are powering the Itaipu ±600kV HVDC Transmission Revitalization Project in Brazil, which is due to be completed in 2026 and will help boost clean energy supply and China-Brazil energy cooperation.

China’s AI companies are building a multibillion dollar revenue machines. The chart estimates that annual recurring revenue across major Chinese AI companies rose from approximately $4 billion in December 2025 to $13 billion by August 2026. That represents more than a threefold increase in less than one year. ByteDance appears to be the largest contributor at approximately $4 billion, while Tencent, Alibaba, and Zhipu are each estimated at roughly $2 billion. DeepSeek, MiniMax, and Kimi are also generating additional revenue as Chinese companies commercialize their AI models through cloud services, subscriptions, advertising, enterprise software, and application programming interfaces. The important point is that these companies are moving beyond model development and beginning to generate recurring revenue from real customers. When AI usage continues expanding across search, advertising, coding, customer service, and business automation, these revenue streams could grow rapidly. The strongest companies will eventually benefit from operating leverage because the cost of serving additional customers can decline as their models, infrastructure and distribution networks scale. ByteDance, Tencent, and Alibaba may have an advantage because they already control large user bases, advertising platforms, cloud businesses, and enterprise relationships. Zhipu, DeepSeek, MiniMax, and Kimi could benefit if their models gain market share among Chinese developers, businesses, and consumers. Now here is how you can invest in all of these. Alibaba provides exposure to cloud computing and its own AI ecosystem. Tencent offers exposure to AI through cloud services, advertising, gaming, enterprise software, and its large consumer platform. Baidu is another option because it has invested heavily in AI models, cloud infrastructure, and autonomous technologies. You can also look at Chinese technology ETFs, which may provide broader exposure to companies benefiting from the country’s AI expansion. The chart uses estimates and annualized revenue run rates, so the figures should not be treated as audited revenue but the trend is clear Chinese AI companies are scaling both usage and monetization. If you enjoyed this breakdown, make sure to follow @MelvinInvests as I continue breaking down the biggest AI opportunities in both the US and China.

Alibaba plans to train a new artificial intelligence model with between 5 trillion and 10 trillion parameters, Chief Executive Eddie Wu said, as the Chinese technology giant outlined a sweeping strategy encompassing AI models, chips and data centres

Alibaba plans to train a new artificial intelligence model with between 5 trillion and 10 trillion parameters, Chief Executive Eddie Wu said, as the Chinese technology giant outlined a sweeping strategy encompassing AI models, chips and data centres