UBS China Internet Research Director Jin Cong said at a media conference held in Shenzhen that China's Internet sector has declined by about 20% since the beginning of the year. Overseas investors mostly made up from low allocations to standard, but they are still cautious about the macro and cash flow for the second half of the year. According to his estimates, the profit expectations of major Internet companies have dropped from about 680 billion yuan at the beginning of the year to about 600 billion yuan in August due to AI spending, user promotion, and R&D investment crowding out profits. AI has significantly reduced the cost of advertisements and short dramas, but its conversion revenue generation is limited.

UBS China Internet Research Director Jin Cong said at a media conference held in Shenzhen that China's Internet sector has declined by about 20% since the beginning of the year. Overseas investors mostly made up from low allocations to standard, but they are still cautious about the macro and cash flow for the second half of the year. According to his estimates, the profit expectations of major Internet companies have dropped from about 680 billion yuan at the beginning of the year to about 600 billion yuan in August due to AI spending, user promotion, and R&D investment crowding out profits. AI has significantly reduced the cost of advertisements and short dramas, but its conversion revenue generation is limited.