Fund manager points to China as 'missing piece' for AI investors

A portfolio manager at Matthews Asia has laid out a strategy for investors seeking greater exposure to artificial intelligence, arguing that the world's second-largest economy represents an overlooked opportunity in the sector.

Looking beyond established AI hubs

Andrew Mattock, the Matthews Asia portfolio manager behind the strategy, contends that much of the current investor focus on AI has concentrated on companies based in the United States, leaving exposure to Chinese firms developing competing technologies comparatively underweighted in many portfolios. The approach he outlines centers on identifying companies within China's technology and AI ecosystem that could benefit as the country continues to invest heavily in the sector.

Proponents of this view point to China's sustained state and private investment in artificial intelligence research, semiconductor development and applied AI products as evidence that the country's firms are positioned to capture a meaningful share of global growth in the industry, even amid ongoing trade and technology tensions with the United States.

Risks alongside opportunity

Analysts caution that investing in Chinese technology companies carries its own set of risks, including regulatory uncertainty, geopolitical tensions and the broader volatility that has characterized Chinese equity markets in recent years. Export restrictions on advanced semiconductors and related technology, imposed by Washington, have also complicated the operating environment for some Chinese AI firms.

Even so, the strategy reflects a broader debate among asset managers over how best to gain diversified exposure to the AI theme, as investors weigh concentrated bets on a small number of dominant US technology firms against a wider allocation that includes companies from other major economies, including China.