What did you say, Morgan Stanley sees $3-4 trillion potential in China AI firms

China’s hundreds of AI firms could potentially add $3 trillion to $4 trillion in incremental market capitalization to the ecosystem if they were able to raise sufficient capital, Gokul Laroia, Morgan Stanley Asia CEO and co-head of global equities, said at the Lujiazui Forum.

“Outside of the United States, China is the only market that has an independent and holistic AI ecosystem that is evolving,” Laroia said. “Every one of these companies needs capital, and every one of these companies has the potential to create a lot of value.”

AI firms’ need for capital grows “dramatically” as the scale of their businesses expands, he added.

The comments come as Beijing accelerates efforts to direct capital toward its technology sector. China is preparing to spend roughly 2 trillion yuan, or roughly $295 billion, over the next five years building data centers across the country, Bloomberg News reported earlier this month.

The National Development and Reform Commission is among the government agencies drafting a blueprint for a network of interconnected computing hubs nationwide, according to the report.

The plan is tied to China’s new five-year policy blueprint, which lays out ambitions to aggressively adopt AI across the economy and to lead in emerging technologies such as quantum computing and humanoid robots.