# As AI spending soars, can China’s tech giants deliver long-term profits? > Source: > Published: 2026-07-30 09:00:10+00:00 # As AI spending soars, can China’s tech giants deliver long-term profits? Chinese tech giants and frontier AI labs are locked in a parallel race, escalating capital expenditure to match US and domestic rivals [Ben Jiang](/author/ben-jiang)in Beijing As US tech giants face growing market scrutiny over their swelling artificial intelligence budgets, China’s top technology firms are confronting a similar reckoning: proving that billions of dollars spent on AI infrastructure will yield sustainable profits. Here is a run down on how Chinese tech giants are navigating the AI monetisation challenge. ### Why are global investors nervous about ‘big tech’ AI spending? [Meta Platforms](https://www.scmp.com/topics/meta-platforms?module=inline&pgtype=article)saw its Nasdaq-listed shares fall about 8 per cent in after-hours trading on Wednesday following its second-quarter results. Despite beating revenue expectations with US$60.8 billion, Meta’s rising AI spending and a drop in free cash flow alarmed investors. Meta’s slip followed Alphabet’s quarterly earnings last week, where the Google parent logged its first-ever negative quarterly free cash flow as massive AI outlays outpaced revenue generation, fuelling fears of an AI bubble. ### Are Chinese firms facing similar pressure to justify AI expenditure? Yes. Chinese tech powerhouses and frontier AI labs are locked in a parallel race, escalating capital expenditure to match domestic rivals and US competitors. However, the battlefield is rapidly shifting from model capabilities to capital efficiency and return on investment. [as AI products begin to show commercial traction.](https://www.scmp.com/tech/big-tech/article/3353487/alibaba-shares-surge-8-new-york-firm-accelerates-pivot-ai?module=inline&pgtype=article)