In a remarkable turn of events in early February 2023, the three major telecommunications operators in China—China Telecom, China Unicom, and China Mobile—experienced a significant surge in their stock pricesOn February 10, these companies witnessed a collective rise in their shares, with China Telecom hitting a ceiling price, which marked a record high for its stockChina Unicom followed closely with an impressive peak increase of over 7.8%, while China Mobile's stock also showed a substantial rise of approximately 4.6%. By the end of the trading day, China Telecom had recorded a 6.59% increase, China Unicom rose by 4.4%, and China Mobile saw a growth of 1.72%. This positive momentum in the stock market can be traced back to a critical announcement made on February 8, when the Ministry of Industry and Information Technology in China highlighted the full integration of the 'DeepSeek' open-source large model by the three major telecom companiesThis integration aims to enable the application of this cutting-edge technology across multiple scenarios and product offerings, specifically catering to the popular DeepSeek-R1 model through a comprehensive computing capability scheme designed to enhance the performance of domestic large models.

The surge in stock prices reflects a broader sentiment among investors who believe that these telecom giants possess unparalleled advantages in data resources and network infrastructureThis belief is rooted in the notion that their deep integration with DeepSeek and similar AI technologies could pave the way for new revenue streams, ultimately bolstering the companies' profitability and market valueThis optimistic outlook is indeed materializing as evidenced by the rising stock prices.

DeepSeek has recently gained immense popularity in the tech world, with its success captivating the entire AI industry chainGiven that telecom operators are closely linked to digital information transmission and data center resources, there are great expectations from the market regarding their involvement with DeepSeek

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China Telecom, for instance, has leveraged its self-developed Tianyi Cloud to introduce the 'Xirang' intelligent computing platform, marking a groundbreaking achievement in aligning native computing power with the DeepSeek-R1 and V3 series large modelsThis positions China Telecom as the first domestic operator to realize the rollout of an all-stack localized inference service through their cloud platform.

Meanwhile, China Mobile’s subsidiary service, Mobile Cloud, has integrated the DeepSeek model thoroughly, achieving “full version coverage, all size adaptation, and functional implementation.” With a network of 13 intelligent computing centers encompassing the whole nation, they offer flexible deployment optionsUsers are afforded the capability to select any intelligent computing resource pool for operations such as deployment, distillation, and intelligent agent orchestration.

In a similar vein, China Unicom has used its Xingluo platform to facilitate the adaptation of the DeepSeek-R1 model across multiple specifications, accommodating both privatized and public scenariosThis technology is pre-deployed across over 270 backbone cloud pools, allowing seamless integration into various products like Unicom Cloud Desktop and programming assistantsThe partnership between the three main telecom operators and DeepSeek signifies not only a technological fit but also an innovative commercial venture into unchartered territories.

As the AI industry revolutionizes traditional sectors, the roles of telecom operators are evolving rapidlyNo longer just passive conduits for communication, these operators are transforming into architects of smart service ecosystemsThe advent of DeepSeek propels this transformation by accelerating the shift from traditional telecommunication models towards smarter and more integrated service offerings.

With the growth of traditional communication services slowing to single digits, the urgency of integrating AI transformation into their operations has become a crucial challenge for survival

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The three major telecom operators now find themselves at the brink of a re-evaluation of their market valueReportedly, CITIC Securities has noted that the announcement of full-access integration with DeepSeek by these operators positions them favorably for expediting cloud computing revenue growth.

Moreover, Huatai Securities has indicated that under the leadership of DeepSeek, the depth and breadth of AI application outreach are poised for substantial advancement, generating robust demand for connectivity and inference applicationsThis transformation promises to benefit the telecom operators by capitalizing on their unique strengths in the integration of networks, cloud computing, and end-user services.

Firstly, the demand for network traffic is expected to grow significantly as AI applications proliferate, reinvigorating growth in data communication servicesSecondly, the market shares of the three operators in domestic cloud and data center industries are leading, suggesting dual enhancements in growth potential and profitabilityAdditionally, AI's potential to expand connectivity from "person-to-person" to "thing-to-thing" is a game changer for operational dynamics.

Over the past few years, these telecom companies have proactively engaged in digital transformation strategies, enhancing their investments in 5G networks, cloud computing, and big data to create a robust digital foundationThis evolution has seen them emerge as essential players in the domestic cloud computing landscapeFor example, China Mobile has emphasized developing the 'Nine Heavens' AI platform, while China Unicom has rolled out its "Unicom Cloud," and China Telecom continues to optimize its Tianyi Cloud offeringsSuch initiatives not only boost the operational efficiency of these companies but also establish a strong foundation for engaging with the growing AI ecosystem.

According to IDC statistics, by the first half of 2024, China's Telecom and Mobile are projected to capture a market share of 13% and 9% respectively in the domestic public cloud Infrastructure-as-a-Service (IaaS) sector, placing them as the third and fourth largest players in this domain.

Additionally, these operators are pivotal in driving the advancement of domestic computing power

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