--- title: "AI model upgrades are clustered, domestic computing power demand surges, will IDC 迎来 a new round of explosion?" type: "News" locale: "en" url: "https://longbridge.com/en/news/275876097.md" description: "Bank of America pointed out that the Chinese AI industry is experiencing a critical turning point: the explosion of video generation models has pushed the demand for computing power up several orders of magnitude, leading to comprehensive price increases for cloud services and model APIs (KNOWLEDGE ATLAS raised by 30%, UCloud adjusted prices across the board), signaling the end of the price war and the return of pricing power to sellers. IDC leasing prices have stabilized and rebounded, with leading data centers such as Century Internet and GDS facing a value reassessment, as the explosion of AI inference is opening a new round of prosperity cycle for China's IDC" datetime: "2026-02-13T09:13:58.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/275876097.md) - [en](https://longbridge.com/en/news/275876097.md) - [zh-HK](https://longbridge.com/zh-HK/news/275876097.md) generator: "portal-rs" --- # AI model upgrades are clustered, domestic computing power demand surges, will IDC 迎来 a new round of explosion? Bank of America pointed out that the Chinese AI industry has reached an extremely critical turning point this week. It is no longer just an arms race about technical parameters, but rather a substantial commercialization landing and demand explosion. With giants like ByteDance and KNOWLEDGE ATLAS intensively releasing the next generation of large models, especially breakthroughs in video generation capabilities, the demand for computing power is growing exponentially. According to the Chasing Wind Trading Desk, on February 12, Bank of America, in its latest research report, believes that for investors, the most direct signal does not come from the flashy capabilities of the models, but from rising prices. From KNOWLEDGE ATLAS significantly raising API prices to public cloud provider UCloud increasing prices across the board, all are sending a clear signal to the market: the years-long price war in cloud computing has ended, and pricing power is returning to the sellers. Bank of America Securities clearly stated that this trend will directly benefit China's data center sector. Against the backdrop of computing power being in short supply, IDC leasing prices are expected to stabilize and rebound, with Century Internet, GDS, and Kingsoft Cloud likely to become the biggest beneficiaries. This is a revaluation of the infrastructure sector, and investors should realize that large-scale AI inference and training are reshaping the valuation logic of IDC. ## **Video Generation Models Ignite Demand for Computing Power, ByteDance and KNOWLEDGE ATLAS Lead the Way** This week, the developments in China's AI field are breathtaking, with major manufacturers competing for technological supremacy. Bank of America Securities' research report emphasizes that **the Seedance 2.0 released by ByteDance is not just an iteration; it showcases advanced multimodal capabilities, particularly the next generation of video generation technology.** At the same time, KNOWLEDGE ATLAS launched its flagship model GLM-5, achieving significant enhancements in programming and reasoning performance. DeepSeek updated its model to support longer context windows and an updated knowledge base, while MiniMax also released version M2.5 for testing on its overseas platform. The release of these models is not just a press release; they directly create a huge gap in computing power. The report cites data from the co-founder of Fal.ai, indicating that generating a 5-second video clip (24 frames per second) requires computing power approximately 120,000 times that needed to generate 200 tokens (about 150 characters) of text. This data is shocking, meaning that if ByteDance's Seedance 2.0 can successfully promote the widespread application of video generation, the entire market's demand for token consumption and computing power infrastructure will experience an order-of-magnitude leap. This is a significant fundamental benefit for IDC vendors with abundant reserve resources. ## **End of Price War: Strong Demand Drives Price Increases for Cloud Services and Model APIs** The market's favorite catalyst is none other than "price increases." **The report keenly captures the structural changes in industry pricing dynamics.** Due to excessively strong demand, KNOWLEDGE ATLAS has raised the price of its GLM code plan for new users by at least 30%. In the public cloud sector, UCloud announced price increases for all renewal and new order products and services This phenomenon is not an isolated case but rather aligns with global trends. Bank of America Securities pointed out that **after global peers like Google Cloud and AWS have successively raised prices for some services, Chinese Cloud Service Providers (CSPs) have also begun to follow suit.** The main driving forces behind this are twofold: **first, the rising costs of hardware components (such as memory), and second, the reversal of supply and demand relationships brought about by the surge in AI workloads.** For public cloud vendors, strong AI demand supports the pricing system, allowing them to pass on rising hardware costs to downstream customers. For the IDC industry, price increases by cloud vendors will further stabilize the rental price trend of IDC, not only marking the establishment of the industry's bottom but also signaling the start of a profit margin recovery cycle. ## **Positive Outlook for Century Internet and GDS: Revaluation of Infrastructure Leaders** Based on the above industry logic, Bank of America Securities has reassessed the relevant targets. The research report views Century Internet as a direct beneficiary of ByteDance's AI spending. Given Century Internet's ample capacity reserves in Ulanqab and its role as a key IDC supplier for ByteDance, if video generation applications explode, Century Internet will be the first to benefit. Bank of America Securities raised Century Internet's target price from $15.1 to $17.9, increasing the valuation multiple to 15 times the future 12-month EV/EBITDA to reflect its faster revenue growth prospects. For GDS, the report also maintains a "Buy" rating and raised the target price from $50.0/$49.1 HKD to $56.7/$55.6 HKD. Bank of America Securities adopted a Sum of the Parts (SOTP) valuation method: assigning a 14 times EV/EBITDA to its China business (GDS), which is at a 20% discount compared to overseas peers; while for its international business, a valuation of up to 25 times EV/EBITDA was given. **GDS's resource layout around Beijing enables it to fully capture the incremental demand from leading domestic model companies (such as KNOWLEDGE ATLAS and ByteDance).** ## **Kingsoft Cloud: A Long-Term Winner in the Xiaomi Ecosystem** In addition to pure IDC vendors, the report believes that Kingsoft Cloud will benefit from the cloud service demand upturn cycle brought about by Xiaomi's "People × Car × Home" ecosystem strategy in 2026. As the Xiaomi ecosystem's demand for AI training, inference, and data services increases, this will provide Kingsoft Cloud with several years of growth tailwinds. Although the target price remains unchanged at $17.0/$8.8 HKD, analysts emphasize that after several years of industry-wide price reductions, the pricing dynamics of the public cloud industry are entering a positive turning point, and Kingsoft Cloud is well-positioned in this recovery cycle. According to the report data, Kingsoft Cloud is given a 3 times future 12-month price-to-sales (P/S) valuation, reflecting the market's greater emphasis on its growth prospects than on short-term profitability ### Related Stocks - [688158.CN](https://longbridge.com/en/quote/688158.CN.md) - [09698.HK](https://longbridge.com/en/quote/09698.HK.md) - [02513.HK](https://longbridge.com/en/quote/02513.HK.md) - [GDS.US](https://longbridge.com/en/quote/GDS.US.md) ## Related News & Research - [Is GDS Holdings (NasdaqGM:GDS) Undervalued Or Is Its Recent Weakness Already Priced In?](https://longbridge.com/en/news/298119619.md) - [GDS Holdings Files Hong Kong 2026 Interim Report with U.S. SEC](https://longbridge.com/en/news/298034429.md) - [Chinese shoppers can now buy AI subscriptions from DeepSeek and Z.ai on Tmall](https://longbridge.com/en/news/298203020.md) - [Do Z.ai and MiniMax face different financial fates months after Hong Kong IPOs?](https://longbridge.com/en/news/297919383.md) - [Z.AI's Tmall Flagship Store Searches Surge 50x; Token Product Deals Jump 1.6x+](https://longbridge.com/en/news/298010550.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**