China’s telecoms giants bet on ‘token factories’ as AI drives revenue growth

China's leading state-owned telecommunications companies, China Mobile, China Telecom, and China Unicom, are increasingly focusing on generating revenue through the production and management of artificial intelligence (AI) tokens, signaling a strategic shift toward leveraging AI-driven growth amid rising demand for computational power across the nation. This move comes as these firms highlight the growing importance of token-based services in their financial reports for the first half of the year, emphasizing the role of tokens, the basic units of data processed by AI models, as a core metric alongside traditional metrics such as compute power and data volume. China Telecom reported a dramatic 95 percent rise in intelligent computing revenue during the first half of the year, contributing to a 7.1 percent increase in its broader "intelligent business" revenue, which reached 31.1 billion yuan ($4.6 billion). The company attributed this growth to the expansion of its token-based offerings for mobile users nationwide and the recent enhancement of its Xingchen TokenHub platform. This platform currently hosts 142 large language models and more than 420 industry-specific AI applications, according to the firm. Additionally, China Telecom has upgraded its Xirang orchestration software, which manages compute resources and networks, to support more than 20 different chip architectures. Concurrently, its cloud revenue increased by 7.8 percent, reaching 61.8 billion yuan. China Unicom, which released its earnings report earlier in the week, noted a 13 percent increase in computing-power-related revenue, amounting to 41.9 billion yuan. This growth was driven by performance across data centers, leased compute resources, business software, and cloud-based AI solutions. In its filing, the company detailed the introduction of a "token supermarket," which forms part of a comprehensive ecosystem designed to facilitate the creation, transfer, storage, and utilization of AI tokens. The company's UniAI platform connects more than 200 large language models and aggregates over 500 terabytes of high-quality data, supporting its AI infrastructure. China Mobile, while not disclosing specific figures related to AI tokens in its latest financial statements, has also signaled its intent to capitalize on the burgeoning AI market. The company has been investing heavily in expanding its network capabilities and enhancing its cloud services to better accommodate the increasing demands of AI applications. These efforts align with broader national initiatives aimed at fostering innovation in artificial intelligence and securing China's position as a global leader in the technology sector. The push by these telecom giants into AI tokenization reflects a broader trend within China's tech industry, where businesses are seeking new avenues for monetizing AI technologies. As AI adoption continues to accelerate across sectors ranging from healthcare to finance, the need for robust computational infrastructure and efficient data processing mechanisms has become paramount. By positioning themselves as key players in the AI token economy, these companies aim to capture a significant share of the growing market for AI-driven services. Industry analysts suggest that the rapid development of AI token platforms could reshape how enterprises access and utilize AI technologies. With each major player introducing unique ecosystems and tools, competition is likely to intensify, potentially driving down costs and improving accessibility for smaller firms and individual developers. However, challenges remain, including ensuring interoperability between different platforms and addressing concerns around data privacy and security. As these companies continue to refine their AI token offerings and expand their infrastructures, they are expected to play a pivotal role in shaping the future of AI deployment in China. Their ongoing investments and innovations will be closely watched by both domestic and international stakeholders, who are keen to understand how these developments might influence the global AI landscape.