chinas artificial intelligence evolution is at an inflection point and the country is catching up with the us according to morgan stanley in fact the bank estimates theres a 74 trillion ai opportunity in china we believe chinas ai evolution is at an inflection point set to drive consumer behavioral change and business transformation and more important accelerate tech diffusion across the economy the bank said in a june 19 report morgan stanley said a mass adoption of ai applications is set to drive further digitalization of businesstoconsumer and businesstobusiness transactions in addition to the productivity boost it will give the economy thats set to benefit some big chinese tech names which are also listed in the united states stock picks the bank named ecommerce giant alibaba  internet services firms baidu and tencent  which it described as ai enablers given their willingnesscapabilities to invest and rich proprietary data resources when it comes to cloud services alibaba has the highest market share at around 40 tencent has 1020 and baidu has 5 according to morgan stanley all three also have or are rushing to develop ai chatbots in response to the wildly popular chatgpt morgan stanley in a separate note flagged baidu in particular as the best ai play in china and the most obvious beneficiary of the 74 trillion ai opportunity in china it is one of the very few cloud service providers that has built a fullstack cloud framework providing ai offerings from hardware frameworks and models to industry applications  baidu has also proven its solid ai abilities by extending such technology to intelligent driving it already runs the largest robotaxi fleet globally and has established autonomous driving oem partnerships the banks analysts wrote baidu chinas largest search engine owns the most extensive proprietary search data and its essential for the development of aigenerated content morgan stanley noted being the first player to launch a chatgpttype product in china baidu enjoys early mover advantage not only in terms of better model training but also increasing potential switching costs for enterprises once they have integrated with baidu cloud the bank said referring to its chatbot ernie it also pointed to baidus willingness to continue research and development investments in ai the outlook for baidus revenue growth is improving the bank added saying its nonmarketing growth has been picking up from 12 of the revenue mix in 2019 to 30 in 2022 morgan stanley predicts that growth will be close to 50 in the next three to five years for 2025 it predicts that there will be a 12 upside to baidus core revenue estimates morgan stanley gave baidu a target price of 190 or 35 potential upside cnbcs michael bloom contributed to this report