VNET Seeing Strong AI-Driven Demand

We expect VNET Group to continue to purchase and build data centers in and around its focus Tier 1 Chinese cities of Shanghai, Beijing, Shenzhen, and Guangzhou. As its network of interconnected data centers grows, it can more easily cater to the demand from its key cloud service provider customers, allowing them to expand in a flexible way in their key markets. This also enables key enterprise customers to deploy their hybrid clouds in close proximity to the networked nodes of leading public clouds. We also expect VNET to complement its basic data center offerings with value-added services such as managed hosting, cloud, and VPN services. In the foreseeable future, demand for GDS' services is being driven by strong demand across the board from companies and government investment in artificial intelligence. We remain confident in the longer-term demand for data centers in China as the country continues to revolutionize its operations digitally across government and private sectors.