China's Open Model Run
Brandon Handoko@brandon
−9.2%
since Sep 30
The idea
I believe Chinese open-source models, led by Qwen, become the default weights the world builds on, and that Huawei's Ascend chips get their moment as more models get trained on them over the next year or two. Since Huawei itself isn't tradable here, I built this around US-listed proxies: Alibaba and Baidu as model builders, broad China tech ETFs for names like Tencent and Cambricon, ACM Research for the fab equipment side, and data-center operators where that compute actually runs.
What it owns
- Chinese AI labs building open-weights models that developers globally can access and run, anchored in US-listed companies. · Alibaba GroupIt builds Qwen, the open-weights model developers reach for first, and backs other Chinese labs, making it the most direct way to own the open-model call., BaiduIt operates Ernie and an AI cloud selling model access, so it shares in Chinese AI infrastructure demand even when other models take the lead., NetEaseIt deploys Chinese-built models in games as one of the first places open-weights AI turns into products people pay for and engage with.29%
- Funds holding the model makers and tech platforms stuck in Hong Kong and Shanghai exchanges that drive the open-model buildout. · KraneShares CSI China Internet ETFIt gives access to Tencent and Kuaishou, model makers unavailable directly on US exchanges, and tracks the broad Chinese internet platforms both building and deploying open models., KraneShares Hang Seng TECH ETFIt reaches Hong Kong-listed AI and chip companies that only trade there, filling the gap that unlisted players leave in the supply chain., Invesco China Technology ETFIt spreads across Chinese tech broadly, catching second-order winners if open-source models draw global attention to the whole sector.25%
- Data centers and cloud platforms renting capacity to train and serve Chinese-built models at scale. · GDS HoldingsIt operates Chinese data centers where AI models get trained and served, so training demand shows up as capacity bookings., VNET GroupIt sells wholesale data-center capacity to Chinese clouds and AI players training models, offering higher-beta exposure to compute demand., Kingsoft CloudIt rents compute capacity to Chinese model makers and cloud platforms scaling up training and serving, anchored by the Xiaomi ecosystem.17%
- The suppliers and fabricators of China's homegrown AI chips, reachable through US-listed equipment makers and Shanghai-listed foundries. · ACM ResearchIt sells fabrication equipment into Chinese foundries building domestic AI chips, so chip production orders flow through as gear sales., KraneShares SSE STAR Market 50 ETFIt holds SMIC and Cambricon, the fabrication and design core of the Ascend ecosystem that determines whether domestic Chinese AI chips gain ground.17%
- Cash11%