A blistering rally in Chinese mainland technology shares accelerated on Wednesday as renewed bets on artificial intelligence sent a key gauge to the highest in nearly four years.

The Hang Seng Tech Index, which tracks the largest tech firms listed in the Hong Kong Special Administrative Region, rose as much as 3.9 percent to hit its highest level since November 2021.

Search engine operator Baidu Inc led gains with a 19 percent jump but multiple tech giants came along for the ride: Shares of Alibaba Group Holding Ltd, Semiconductor Manufacturing International Corp, and JD.com Inc all surged in morning trading.

The index is now set for its seventh consecutive week of gains, helped by hopes that tech companies’ big bets on AI will pay off. The gauge has surged 41 percent this year, trouncing a benchmark of regional peers.

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“China tech leaders are visibly re-accelerating AI spend and product rollouts — models, robotaxis, in-house chips — while also proving they can monetize AI faster than many expected,” said Charu Chanana, chief investment strategist at Saxo Markets. “With valuations lagging the US, investors are starting to pay attention again.”

The Hang Seng Tech Index trades at around 20.5 times forward earnings, below its five-year average of 23.3 times earnings and Nasdaq 100 Index’s ratio of 27 times, according to Bloomberg-compiled data.

Brokers are quickly lifting price targets. Goldman Sachs Group Inc has raised its target for Alibaba’s shares, citing a better outlook for its cloud business. Arete Research Services LLP lifted its rating on Baidu’s American depositary receipts to buy from sell on the growth potential for its in-house chip business. Earlier this week, JPMorgan Chase & Co upgraded its rating on battery maker Contemporary Amperex Technology Co.

Other headwinds for the mainland’s internet sector are starting to clear. A local media report citing JD.com chairman Richard Liu saying he was not interested in starting a price war in the hotel sector sent shares of the e-commerce giant surging by more than 6 percent. Rivals including Meituan and Trip.com Group Ltd also jumped.

Big Spending

The mainland’s biggest tech companies are in the middle of a spending spree on AI, as they race against one another and against US firms to conquer a market widely expected to revolutionize how people live and work.

Total capital expenditure from major mainland internet firms such as Alibaba, Tencent Holdings Ltd, Baidu and JD.com is set to hit $32 billion in 2025, more than doubling from $13 billion in 2023, according to a Bloomberg Intelligence report.

That has helped create a funding spree in equity and bond markets. Alibaba raised $3.2 billion from a blockbuster convertible bond offering last week, while Tencent turned to the dim sum bond market for 9 billion yuan ($1.27 billion) on Tuesday, its first bond sale in four years.

READ MORE: HK stocks open week on positive note as rate cut expectations rise

The latest news fueling optimism was a state television report Tuesday night that China Unicom’s Sanjiangyuan data center has signed contracts to deploy AI chips from local firms including Alibaba’s chip unit T-Head.

Separately, mainland foundry SMIC’s shares jumped over 6 percent following a report that it is running trials on the mainland’s first domestically produced advanced chipmaking equipment.

The booking funnel is fractured by generation, with younger travelers leaning more on technology and social media.

In July, travel technology company iSeatz commissioned that included responses from 1,000 Americans travelers over the age of 18. The survey, conducted by Talker Research and titled “The Modern Traveler 2025,” revealed that the booking path no longer follows traditional patterns.

“Today’s travelers are not just choosing destinations. They are navigating a digital journey from discovery to booking, and they expect it to feel effortless, intuitive and personalized at every step,” said Kenneth Purcell, founder and CEO of iSeatz. “These rising expectations do not come out of nowhere. Consumers have been conditioned by the digital ease of e-commerce, social media and streaming platforms.”

ISeatz found that travelers are discovering travel opportunities in a more fluid process, which also requires more steps. 

“Instead of following a straight path from idea to booking, most travelers now move back and forth between inspiration, research, comparison and planning across a variety of platforms,”  iSeatz said in its report.

This shift is tied to social media for younger generations, while older generations are still relying on friends and family for recommendations.

Generally speaking, 43% of respondents said they are inspired by loved ones. But younger generations are more often inspired by social media: 52% of Gen Z and 46% of millennials said it is their “primary source” for travel inspiration.

The report found that during the research phase, 45% of Gen Z members prefer using social media over traditional search engines. Overall, 43% of travelers still use traditional search engines like Google and Bing, but 27% go to social media first.

Nearly 40% of travelers also said social media influencers had a “significant impact” on how they book and where they travel, with that figure ticking up among younger generations. Sixty-two percent of Gen Z respondents said influencers impact their decisions.

Social media’s influence is further illustrated by Phocuswright research that found almost two thirds of travelers made a trip purchase or visitation based on content they viewed while trip planning.

Considering the survey results, iSeatz said some travel brands are missing the mark.

“There isn’t currently enough technical infrastructure to support discovery-to-booking experiences within social platforms,” iSeatz said. “That’s a missed opportunity: 53% of millennials and 52% of Gen Z say they’d book travel directly from social media if it were secure and seamless.”

That is a gap that some travel brands and social media platforms—including Expedia and Instagram, Booking.com and TikTok and TourRadar—are trying to solve.

But regardless of age or generation, the funnel is still fragmented, according to iSeatz. 

“Travelers often jump between social feeds, search engines, review sites and booking engines, which creates both friction and opportunity. Travel brands that can bridge these gaps will be better positioned to capture interest and convert it into action.”

Additional AI findings

The rise of artificial intelligence (AI) is having an impact on traveler behavior too, as other reports have also found.

Around one in five travelers reported regularly using AI, and that percentage ticks up among younger travelers, with 35% of Gen Z and 34% of millennials using AI regularly. 

And with AI tools maturing, travelers are anticipating more personalization, iSeatz found.

“Fifty-seven percent of travelers already expect brands to anticipate their preferences and needs based on past behavior,” iSeatz said in its report. “Millennials, in particular, are driving this shift. Seventy-four percent say personalization is a baseline expectation, not a bonus.”

And the majority of travelers are not strongly opposed to sharing their data to make that happen.

“The travel companies that succeed in this new landscape will be the ones that understand their customers deeply and design every touchpoint around what today’s travelers value most,” iSeatz said.

The era of agentic AI is here, or so we are told, bringing super-smart AI assistants capable of carrying out complex tasks on our behalf.

This represents the next generation of AI beyond current chatbots like ChatGPT and Claude, which simply answer questions or generate content.

Those building (and selling) the tech tell us we are on the verge of a fully-automated future where AIs cooperate and access external systems to carry out vast numbers of routine knowledge and decision-making tasks.

But just as emerging concerns around hallucinations, data privacy and copyright have put up barriers to generative AI that some organizations have found insurmountable, agents have their own set of obstacles.

So, here’s my rundown of the challenges that developers of AI agents, organizations wanting to leverage them, and society at large will have to overcome, if we’re going to deliver the promised agentic future.

Trust

The biggie. To achieve the critical mass of adoption needed to fuel mainstream adoption of AI agents, we have to be able to trust them. This is true on several levels; we have to trust them with the sensitive and personal data they need to make decisions on our behalf, and we have to trust that the technology works, our efforts aren’t hampered by specific AI flaws like hallucinations. And if we are trusting it to make serious decisions, such as buying decisions, we have to trust that it will make the right ones and not waste our money.

Agents are far from flawless, and it’s already been shown that it’s possible to trick them. Companies see the benefits but also understand the real risks of breaching customer trust, which can include severe reputational and business damage. Mitigating these risks requires careful planning and compliance, which creates barriers for many.

Lack Of Agentic Infrastructure

Another problem is that agentic AI relies on the ability of agents to interact and operate with third-party systems, and many third-party systems aren’t set up to work with this yet. Computer-using agents (such as OpenAI Operator and Manus AI) circumvent this by using computer vision to understand what’s on a screen. This means they can use many websites and apps just like we can, whether or not they’re programmed to work with them. However, they’re far from perfect, with current benchmarking showing that they’re generally less successful than humans at many tasks.

As agentic frameworks mature, the digital infrastructure of the world is likely to mature around them. Most people reading this will remember that it took a few years from the introduction of smartphones to mobile-friendly websites becoming the norm. However, at this early stage, this creates risk for operators of services like e-commerce or government portals that agents need to interact with. Who is responsible if an agent makes erroneous buying decisions or incorrectly files a legal document? Until issues like this are resolved, operators may shy away from letting agents interact with their systems.

Security Concerns

It doesn’t take much imagination to see that, in principle, AI agents could be a security nightmare. With their broad and trusted access to tools and platforms, as well as our data, they are powerful assistants and also high-value propositions for cybercriminals. If hijacked or exploited, criminals potentially have decision-making access to our lives. Combined with other high-tech attacks, such as deepfake phishing attempts, AI agents will create new and potentially highly problematic avenues of attack for hackers, fraudsters and extortionists. Agents must be deployed by individuals as well as businesses in a way that’s resilient to these types of threats, which not everyone is yet capable of doing.

Cultural And Societal Barriers

Finally, there are wider cultural concerns that go beyond technology. Some people are uncomfortable with the idea of letting AI make decisions for them, regardless of how routine or mundane those decisions may be. Others are nervous about the impact that AI will have on jobs, society or the planet. These are all totally valid and understandable concerns and can’t be dismissed as barriers to be overcome simply through top-down education and messaging.

Unfortunately, there’s no shortcut available here. Addressing this will involve demonstrating that agents can work in a reliable, trustworthy and ethical way. Pulling this off while also building a culture that manages change effectively and shares the benefits of agentic AI inclusively is the key here.

Agents Of Tomorrow

The vision of agentic AI is quite mind-boggling: Millions of intelligent systems around the world interacting to get things done, in ways that make us more efficient and capable.

As we’ve seen, however, the obstacles to this are just as likely to be human as they are technological. As well as solving fundamental issues like AI hallucination, and building infrastructure that enables agents in ways that are trustworthy and accountable, we have to prepare society for a fundamental shift in the way people work with machines.

Accomplishing this will pave the way for AI agents to hit the mainstream in a safe way that enhances our lives rather than exposes us to risks.