Broker: OCBC Investment Research
Date: 24 September 2024

Focus on AI Development and Core Technologies

China Telecom (CT) has intensified its efforts to make significant breakthroughs in key core technologies. The company is particularly focused on four main areas: network, cloud and cloud-network integration, AI, and quantum/security. CT is deploying an overall AI framework under the “Xingchen” brand, enhancing its capabilities across various industries. The Xingchen large model series is central to CT’s strategy, empowering intelligent transformations in industries to reduce costs and improve efficiency.

Expansion of AI Products and Services

China Telecom has actively expanded its AI-related offerings. The company introduced AI products like AI phones, cloud computers, and integrated devices to meet the growing demands of its diverse customer base. The Xingchen large model for government administration hotlines has significantly improved efficiency and user experience. Additionally, the “Xingchen Smart Answers” system has upgraded interactions via SMS, expanding LLM services to more households.

The Xingchen LLM, the first independently certified speech model in China, is being used across various sectors, including industry, education, healthcare, and government. China Telecom’s open-source initiatives lead the way for state-owned enterprises (SOEs), with 32 vertical models supporting 370 enterprise projects.

AI Development Tool: Xingchen Software Factory

China Telecom has also launched “Xingchen Software Factory,” China’s first AI development tool capable of automatically generating and testing code. This initiative aims to drive AI adoption among enterprises, particularly by providing efficient tools to accelerate intelligent transformation. Through open-source releases and the deployment of the Xingchen AI framework, China Telecom is supporting a range of business sectors with state-of-the-art AI solutions.

Intelligent Computing Cloud: “Xirang”

On the intelligent computing cloud front, China Telecom has established the “Xirang” integrated intelligent computing service, which offers powerful computing capabilities and model application services. “Xirang” now has access to 22 EFLOPS (floating-point operations per second) of intelligent computing power, derived from 39 partners. This computing infrastructure has been fully upgraded, transitioning into the next stage of intelligent cloud development. This service offers businesses a seamless integration of AI and cloud technology, optimizing their operational capabilities.

Data Chain AI Network

China Telecom has introduced the “Data Chain AI Network (DCAN)” system to develop high-quality datasets from public, industrial, and internet sources. The company’s Xinghai data platform has empowered over 150 projects for government and enterprise clients. In addition, the Lingze 2.0 platform supports data infrastructure development across 22 provinces. China Telecom has expanded its data product ecosystem to over 1,300 partners and 2,000 products, making it a key player in the country’s data-driven digital economy.

AI-Optimized Digital Infrastructure

China Telecom continues to focus on evolving its digital infrastructure, adhering to the principle of “network as the foundation, cloud as the core.” The company built advanced computing infrastructure with cloud-intelligence integration, completing liquid-cooling GPU pools in key regions for large-model training tasks. These GPU pools are now utilized for training models at the trillion-parameter level and are deployed across 31 provinces for inference tasks. China Telecom’s intelligent computing power grew by 10 EFLOPS, bringing its total to 21 EFLOPS. The company also upgraded its data centers to meet AIDC (artificial intelligence data center) standards, enhancing energy efficiency and enabling faster, agile delivery of AI services.

Leadership in Cloud-Network Integration

China Telecom continues to advance its leadership in cloud-network integration. It has built a competitive AI industry chain with high-throughput, low-latency computing networks, which are crucial for AI-driven businesses. These investments in intelligent infrastructure position China Telecom as a critical enabler of enterprise digital transformation across a wide array of sectors.

Conclusion

China Telecom’s ongoing investments in AI, cloud, and intelligent computing infrastructure reflect its commitment to becoming a leader in digital transformation. By focusing on developing cutting-edge AI tools and frameworks like Xingchen and Xirang, the company is positioning itself as a key player in China’s evolving digital landscape, driving growth through technology innovation and cloud solutions.