2021.08.20 CoStone Capital Views:
In the prosperity of Artificial Intelligence, more enterprises in China have entered the field of AI technology. Even though artificial intelligence was not its strongest aspect of national development, China still has impressive breakthroughs and prominent enterprises in artificial intelligence, such as Cloudwalk Technology.
Man-machine cooperative operating system business covers a variety of aspects. One of which refers to Cloudwalk provides customers with self-developed operating system, application products, core components and technical services based on man-machine cooperative operating system. Meanwhile, Cloudwalk launched a comprehensive and functional "Light Boat," which is a general service platform based on man-machine collaborative operating system and introduced ecological partners to collaboratively develop AI applications and SaaS services.
AI solution business relates to intelligent upgrade solution to solve the business problems of customers in specific industries. With strong AI technology capabilities and deep understanding of industrial application scenarios, Cloudwalk offers customers integrated solutions. Those solutions cover architecture consulting and design, hardware and software product, and other aspects. The AI solution will take the man-machine cooperative operating system as the core component of the solution architecture, effectively utilize the AI capabilities provided by the operating system. Later, it combines intelligent AIoT devices and third-party hardware and software products to solve specific industrial problems for customers.
Based on independent research and development of core technologies, Cloudwalk has excellent commercialability. Not only it has managed four business aspects —— Intelligent Finance, Intelligent Governance, Intelligent Transportation, and Intelligent Commerce — it also brings convenient and humanized AI experience to people around the world. Said by Costone Capital, artificial intelligence is the key production tool in the next generation. More importantly, it is the key to open the gate of the fourth industrial revolution. Both United States and China leveled artificial intelligence up to national strategy, promoting its development unreservedly. Unlike semiconductor, there is a huge gap between China and the United States in basic algorithm and theoretical research on AI. On the contrary, China is at the forefront of the world in application level, especially its incomparable advantage in database and application scenarios.
In the field of AI operating system, Cloudwalk focuses on man-machine collaboration of the core AI landing strategy. Based on “multi-modal data perception, multi-domain knowledge reasoning, man-machine integration and co-creation, data security sharing” technical breakthroughs, Cloudwalk created man-machine operating system to enable the industrial an ecological development. With sophisticated strategy, profound technical accumulation, and outstanding landing ability, Cloudwalk has the pioneering advantage on the core track of AI development.
Costone Capital has always been putting its attention on the field of artificial intelligence. On the path of AI development, Costone also places emphasis on SenseTime, Fourth Normal Form, SmartMore Technology, Clustar, RealAI, and other excellent enterprises, many of which already became Unicorns or potential Unicorns.
Rewriting by Kong Xiaomei; Editing by Du Zhixin and Li Yunzhen.
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026