China launches AI IPv6 push with 5 large model firms

China's cyberspace regulator is pushing the country's top AI model developers to fully adopt IPv6, tying network infrastructure to AI competitiveness.

The Cyberspace Administration of China, together with four regional offices and five leading large model companies, launched a special action in Xiong'an New Area requiring generative AI applications to fully support IPv6, the next-generation internet protocol that expands the pool of available IP addresses.

"The initiative aims to build a solid network foundation for the intelligent era," the Cyberspace Administration said in a statement from Xiong'an. The action was jointly launched with the cyberspace offices of Beijing, Shanghai, Zhejiang and Shenzhen — four of China's most economically significant regions that house the country's largest AI development clusters.

The five participating large model enterprises were not yet named, but China's AI landscape is dominated by Baidu Inc.'s Ernie Bot, Alibaba Group Holding Ltd.'s Tongyi Qianwen, Tencent Holdings Ltd.'s Hunyuan, and ByteDance Ltd.'s Doubao, alongside emerging players such as Zhipu AI and Baichuan. IPv6 adoption is critical for AI workloads because the current IPv4 protocol, with roughly 4.3 billion addresses, cannot support the scale of device connectivity required for distributed AI training and inference across cloud data centers.

China has been a global leader in IPv6 deployment, with the country's IPv6 active user penetration exceeding 70% as of late 2024, according to data from the China Internet Network Information Center. The new mandate pushes AI-specific infrastructure to catch up with that broader network transition. For companies like Baidu and Alibaba, which operate massive cloud businesses alongside their AI model development, the cost of migrating AI workloads to IPv6-native architectures could run into hundreds of millions of yuan in network reconfiguration and testing.

The policy also reinforces Xiong'an New Area's role as a designated technology hub. The Beijing-backed city, built 100 kilometers south of the capital, has been positioned as a testing ground for next-generation urban infrastructure since its announcement in 2017. Hosting the IPv6-AI initiative adds a specific technology vertical to Xiong'an's portfolio, potentially attracting more AI and cloud infrastructure investment to the region.

For investors, the clearest beneficiaries are Chinese cloud and AI infrastructure providers. Baidu trades at roughly 11 times forward earnings, Alibaba at 10 times, and Tencent at 16 times — valuations that reflect regulatory and macro uncertainty but may not fully price in the infrastructure spending tailwind from government-backed AI initiatives. The policy direction suggests sustained CapEx in data center networking equipment, benefiting domestic suppliers such as Huawei Technologies Co. Ltd. and ZTE Corp., which provide IPv6-compatible routers and switches to China's cloud operators.

This article is for informational purposes only and does not constitute investment advice.