This report does not constitute a rating action. Build it and they will come. This is the likeliest narrative for the rapid expansion of internet data centers in China. S&P Global Ratings believes the major operators have sufficient demand to warrant their capacity additions. For smaller and less competitive players, however, we see a potential asset bubble. In our view, the push for AI development in the country's tech sector will significantly increase demand for computing power. Budgets for internet data centers (IDCs) are on the rise for cloud service providers, social media platforms, and other internet service providers. We estimate that Alibaba Group and Tencent Holdings, which are leading this charge, will in total ramp up annual spending in
