Goldman Sachs research indicates that China's AI profit pool is increasingly concentrating in hardware, particularly semiconductors. In Q2 2026, the Chinese semiconductor sector's profits surged by approximately 150% quarter-on-quarter to $23 billion, accounting for 42% of China's total AI profits, up from just 25% in Q1. Memory chips are a key driver, with domestic memory leaders now holding 13% of global memory profits. Furthermore, China's global profit share in power, AI infrastructure, and physical AI also increased quarter-on-quarter in Q2.