Bank of America experts meeting minutes: Stable demand for data centers in 2025, limited recent impact of AI chip ban.

Recently, Bank of America held a 2025 China conference in Shenzhen, stating that artificial intelligence is driving the continuous growth of data center demand in China. It is expected that from the second half of 2025 to the first half of 2026, the demand for model inference may exceed the training demand. Although the United States has imposed restrictions on the export of artificial intelligence chips, the short-term impact on data center demand in China is limited, mainly because enterprises already have chip reserves and domestic alternatives are gradually advancing. Inference data centers may be concentrated in the surrounding areas of core cities, and rental prices in Beijing and Shanghai are stabilizing. In addition, neutral operator data center market share is expected to increase, as their service quality is more favored by cloud service providers and internet companies. Industry capital expenditure in 2025 is expected to reach 500-600 billion yuan, with intelligent computing accounting for 40%, and this demand-driven upcycle may be more enduring than the policy-driven cycle of 2020-21. The main points of Bank of America Securities are as follows: On May 14 (Wednesday), Bank of America held an investor meeting with data center expert Jie Hu at the 2025 China conference in Shenzhen. The main conclusions of the meeting include: 1) Artificial intelligence is driving data center demand, and this demand-driven upcycle may last longer than the previous policy-driven cycle in 2020-21; 2) Experts believe that the recent impact of US restrictions on the export of artificial intelligence chips on data center demand in China is limited; 3) The demand for artificial intelligence inference is more likely to be concentrated in the surrounding areas of core cities; 4) Neutral operator data centers may gradually gain market share in China. Capital expenditure in 2025 is robust; the demand-driven upcycle may last longer Jie Hu has 25 years of experience in the Chinese data center industry. He believes that the demand for data centers driven by Chinese artificial intelligence is increasing, with approximately 60% coming from model training in 2024, and approximately 40% from model inference. It is expected that in the second half of 2025 or the first half of 2026, the demand for model inference may exceed the training demand. Given the increasing capital expenditure plans of leading companies, he estimates that the total capital expenditure of Chinese internet and cloud computing companies in 2025 will reach 500-600 billion yuan, with 60% for general computing and 40% for intelligent computing. He believes that the current upcycle in capital expenditure is strongly supported by the actual demand triggered by artificial intelligence, and may last for several years, longer than the previous upcycle in capital expenditure driven by policies in 2020-21. Limited impact of the ban on artificial intelligence chips on recent data center demand Jie Hu believes that the impact of the US ban on artificial intelligence chips on the recent demand for data centers in China may be limited, for the following reasons: 1) Major Chinese internet and cloud computing companies have reserves of artificial intelligence chips; 2) Domestic progress in artificial intelligence chips can serve as substitutes. According to Bank of America's experts, from 2024 to the first half of 2025 before the US restrictions were implemented, major Chinese internet and cloud computing companies had already made large purchases of GPUs, with most orders already shipped to China. Large-scale inference data centers may be concentrated in the surrounding areas of core cities Jie Hu predicts that rental prices for data centers in Beijing will remain stable, as large data centers catering to inference demand are more likely to be located in the surrounding areas of Beijing. This is because the cost of transforming traditional low-power data centers into high-power data centers is high, and there is a well-established network connection with Beijing. According to Jie Hu, the monthly rental (excluding electricity costs) for wholesale projects around Shanghai is usually 300-350 yuan per kilowatt, while in the surrounding areas of Beijing it is 350-450 yuan per kilowatt. Neutral operator data center operators' share rising in the era of artificial intelligence Bank of America's experts estimate that telecom operators hold 40%-50% of the market share in the Chinese data center market, followed by 30%-40% for neutral operator data centers, with the rest being self-built data centers. Looking ahead, they predict that the market share of neutral operator data center operators will increase, as in the past year they have received more orders from cloud service providers/internet companies and provided better service quality.