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One of the leading players in China's artificial intelligence sector, Knowledge Atlas Technology (2513), or Zhipu AI, saw its shares surge over 40 percent at a time on Tuesday, after it reportedly completed the construction of a massive 1-gigawatt data center powered entirely by domestically made chips.
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Its shares closed 36 percent higher after jumping 41.7 percent at most.
Its data center has begun partial operation, marking a significant step for Chinese firms to reduce reliance on restricted semiconductors from Nvidia amid geopolitical tensions, according to Bloomberg's report.
The new facility is mainly used to provide computing capacity for the development of Zhipu AI's advanced GLM model, with its ultra-large power capacity equivalent to the electricity required to supply 750,000 homes.
The AI startup has also constructed or operated several large computing clusters, which include more than 10,000 chips each.
Whether Chinese AI firms could keep training and running competitive large language models powered by home-made chips is a key focus for investors in recent years amid intensified AI competition and geopolitical risks.
Currently, Huawei, the major designer of AI accelerators, is competing with Chinese chipmaker Cambricon Technologies and Alibaba (9988), with aims to narrow the performance gap with Nvidia's chips.
Except for the mass purchase of high-end servers, building a large-scale AI data center also needs stable power and water supply, involving multiple billion US dollars in investment.
Despite the relatively large scale of Zhipu AI's new data centers among China's AI industry, leading cloud and telecommunication enterprises like Alibaba and China Telecom (0728) remain the country's major builders of computing infrastructure.
Last month, China reportedly planned to invest about 2 trillion yuan (HK$2.32 trillion) over the next five years to build an AI data center network and AI computing infrastructure across the country.
