The Ministry of Industry and Information Technology said in August that the number of standard racks in use in China's data centers had exceeded 7.6 million units, and the country's computing power had reached 197 EFLOPS, ranking second in the world. EFLOPS is a unit of the speed of computer systems. It equals 1 quintillion floating-point operations per second.

The emergence of Sora will further propel China's investment in computing infrastructure, which includes data centers and cloud computing platforms, and boost the integration and upgrade in China's AI industrial chain, said Wang Peng, a researcher at the Beijing Academy of Social Sciences.

Wang expects that computing power and cloud server providers will work more closely with AI application developers to jointly promote the commercialization of AI technology.

"China's major advantages in developing AI lie in abundant data resources and diverse application scenarios, and a series of supportive measures from authorities, while the US has taken the lead in basic AI research, chips, algorithms and other crucial technologies and a sound innovation ecosystem," he said.

Wang added that Chinese enterprises should step up R&D investment in the aspects of optimization of computing power, server updates and chip designs, offer customized solutions catering to the demands of different industries and expand their presence in overseas markets.

Global market research firm International Data Corp said the scale of China's AI market is expected to reach $26.44 billion in 2026, with a compound annual growth rate of over 20 percent between 2021 and 2026.

Chinese firms have also stepped up the push to expand their presence in the video generation sector. Chinese AI startup Cloudwalk Technology said it has a plan for text-to-image and text-to-video multimodal LLMs and has launched a digital human generation platform, while Sumavision said it has invested heavily in video content production, and will continue to explore AI-generated content technology.

Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, said Chinese AI companies have gained an upper hand in Chinese language-based AI models, and are able to surpass ChatGPT in this domain.

However, as for the video generation model, they need to re-accumulate data and model parameters, and it might be more difficult for them to catch up with their US rivals, Pan said.

"Talent, data and computing power are key to text-to-video generation models," he emphasized, adding that more efforts are also required to bolster the circulation of data elements, especially video data.

Pan's views were echoed by Charlie Dai, vice-president and research director at consultancy Forrester, who said the appearance of Sora will drive China's R&D input in generative AI technology across the whole supply chain, which is of great significance in achieving the country's self-reliance in science and technology and promoting global collaboration in the AI sector.

However, China still lags behind the US in high-quality data for AI model training and fine-tuning, as well as high-performance computing infrastructure like graphics processing units, Dai said.

Zhou Hongyi, founder of Chinese cybersecurity company 360 Security Group, said the appearance of Sora, which is capable of understanding and simulating the physical world, means the realization of artificial general intelligence could be shortened from 10 to one or two years. "AI will not necessarily subvert all industries quickly, but it can stimulate the creativity of more people."

Meanwhile, the use of text-to-video AI models raises concerns about ethics, copyright protection, personal privacy leakage and data security.

"How to ensure the authenticity and transparency of the content has become an important issue, and more efforts are needed to formulate rules and regulations to ensure the healthy development of such technology," said Liu Xingliang, director of the Beijing-based Data Center of China Internet.

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