China's AI Opportunity Extends Far Beyond Frontier Models

Janus Henderson's Look Beyond Frontier Models for Compelling Opportunities Across China's AI Ecosystem argues that investors should look beyond the race for the most advanced AI models and focus on China's broader advantages across the AI value chain.

• The report frames AI as a five-layer ecosystem—energy, chips, infrastructure, models and applications—and argues that China has developed competitive strengths across much of this stack despite trailing the U.S. at the technological frontier.

• While the United States continues to lead in frontier semiconductors and foundation models, China benefits from lower energy costs, rapid infrastructure deployment, manufacturing scale and increasingly competitive open-source AI models that prioritise affordability and commercial adoption.

• Janus Henderson believes the greatest long-term investment opportunities may emerge in the application layer, where AI adoption is spreading into robotics, autonomous driving, healthcare and enterprise software, creating value beyond a small group of frontier model developers.

Read the full report for a detailed framework comparing the U.S. and China across every layer of the AI ecosystem.