Goldman Sachs listed a number of Chinese stocks that it believes could benefit from the development of artificial intelligence, including two stocks that appear on the bank’s buy rating list. In two research notes on July 16, Goldman Sachs outlined the opportunities and risks posed by generative artificial intelligence and picked stocks that could benefit. Goldman Sachs analysts led by Ronald Keung said generative artificial intelligence will require massive amounts of data processing power, which will boost the cloud computing businesses of Chinese internet giants Baidu, Alibaba and Tencent. In its base scenario, generative AI is expected to add 151 billion yuan ($21 billion) in revenue to China’s cloud computing market by 2027, the bank said. E-commerce company Alibaba is on Goldman’s Confidence list – the bank said it expected the company to “return to positive advertising + commission growth from the June 2023 quarter”, adding that its valuation is attractive. “We see Alibaba as one of the best value stock representatives enjoying ad recovery, fintech … and cloud growth,” the analyst said. Baidu is also on Goldman’s conviction list. The bank described it as “a major beneficiary of AI given its multi-year investment as China’s AI leader”. In 2019, Baidu launched Ernie, a large-scale language model (LLM) chatbot, which Goldman Sachs said had “leaded the way in LLM and AI after years of investment.” As for WeChat parent Tencent, the bank said, “As highlighted in our 2023 outlook, it remains one of our top buys this year on ad growth and payments recovery in China’s internet space. We continue to view Tencent as a key ad recovery proxy, driven by video accounts and broader WeChat ad resurgence.” — CNBC’s Michael Bloom contributed to this report.