Chinese technology companies sharply increased capital expenditure in the second quarter of 2026 as demand for artificial-intelligence inference grew and access to advanced chips improved. Despite the jump, Jefferies believes the sustainability of AI spending is a bigger concern for US cloud companies.
Combined capital expenditure by Alibaba, Tencent and Baidu surged 105% YoY and 95% sequentially to 126 billion yuan, or approximately $19 billion, during the quarter.
