Chinese technology companies' capital expenditure is clearly accelerating, and cloud revenue growth is providing fundamental verification that AI demand is converting into real orders rather than remaining an expectation.
Tencent signed an overseas leasing agreement with Oracle on October 2, covering roughly 100,000 AI chips over a five-year term across Oracle data centers in Southeast Asia, in a deal valued at approximately 7 billion USD and including about 30% as prepayment. Tencent's capital expenditure reached 52.8 billion yuan in 2026 Q2, up 176% year-on-year. The company is also increasing overseas compute procurement to support model development.
Zhipu completed roughly 5 billion USD in equity and debt financing, while Alibaba completed a placement of approximately 80 billion Hong Kong dollars. These raises support continued investment in closing the capability gap in model development.
On the global cloud side, second-quarter 2026 earnings show the trend continuing to accelerate. Amazon AWS posted revenue of 42.2 billion USD, up 36.7% year-on-year — an 8.7 percentage point acceleration from the prior quarter. Microsoft Azure grew 43% and Google Cloud 82%, both faster than AWS and both accelerating further. Oracle's cloud infrastructure business grew 93%, with remaining performance obligations rising substantially and large contracts providing demand support for future cloud infrastructure revenue.
Domestic cloud vendors are showing similar growth acceleration.
Consumer-side monetization is also beginning to show. In overseas markets, ChatGPT's advertising annualized revenue run rate reached 1 billion USD, with Muse broadening paths for consumer monetization. In China, the office agent competition and harness ecosystem continue to evolve, with the next stage of growth depending more on effective task volume, usage retention and paid conversion than on raw model capability.
On valuation, based on closing prices as of July 31, by September 30 the IGV index and the Philadelphia Semiconductor Index rose 12.6% and 11.6% respectively, while A-share telecommunications and electronics rose 4.7% and 3.2%, and computers and media fell 5.2% and 3.2%. Valuations for the sector have declined notably from 2025 year-end levels.
Analysts suggested attention to compute services, domestic chips and supernodes, and B-end AI application vendors with scenario, data and enterprise delivery capabilities, noting that AI payment and data call growth in overseas software is supporting valuation recovery while domestic application names remain more differentiated.
