1. Volkswagen Becomes First Global Automaker to License Chinese L4 Autonomous Driving Software from XPeng
Source: CnEVPost, TechNode | February 26, 2026

Volkswagen will be the launch customer for XPeng’s second-generation Vision-Language-Action (VLA 2.0) autonomous driving system, marking the first time a major Western automaker has licensed core AI driving software from a Chinese company at scale. XPeng CEO He Xiaopeng disclosed the deal in an internal memo, describing Volkswagen’s decision as carrying “meaning far beyond the cooperation itself.” VLA 2.0 is an end-to-end neural model designed for L4-capable autonomous driving without HD maps, claiming 13× improvement in average driver takeover distance on complex roads. The partnership expands a relationship that began with VW’s $700 million equity investment in XPeng in 2023 and has since deepened through jointly developed EV platforms and an electrical architecture (CEA) applied across VW’s China lineup. He Xiaopeng also called 2026 “the DeepSeek moment for autonomous driving” and set a target of 1 million overseas sales by 2030. For an industry that spent years assuming the technology licensing flow would run West-to-East, VW’s choice to buy rather than build — after years of costly failures with Cariad, Mobileye, and Argo AI — is a quiet but consequential reversal.
Full Article (TechNode)

2. Baidu Reports FY2025 Earnings: AI-Powered Revenue Hits ¥40 Billion, Announces $5 Billion Buyback
Source: Baidu IR, Investing.com | February 26, 2026

Baidu released Q4 and full-year 2025 results showing that its AI-powered business has crossed a critical mass threshold. Core AI-powered revenue — spanning AI Cloud infrastructure, AI applications, Apollo Go, and AI-native marketing — reached ¥11 billion (~$1.57 billion) in Q4 alone, accounting for 43% of Baidu’s general business revenue. Full-year AI Cloud revenue hit ¥30 billion (~$4.3 billion), with AI accelerator infrastructure subscriptions surging 143% YoY in Q4. Apollo Go surpassed 20 million cumulative rides globally and is expanding into London, Seoul, and St. Gallen, delivering 3.4 million fully driverless rides in Q4. Total revenue for 2025 declined 3% to ¥129.1 billion as legacy search continued to erode, but the company’s pivot toward becoming an AI infrastructure provider looks increasingly irreversible. Baidu announced a $5 billion share repurchase programme and its first-ever dividend policy, and confirmed that the Kunlunxin AI chip unit’s separate listing is progressing — a spin-off that could unlock significant value for a semiconductor business already supplying China Mobile with $139 million in chip orders.
Full Article (Baidu IR)

3. Hygon Posts 57% Revenue Surge to ¥14.4 Billion as China’s AI Chip Demand Accelerates
Source: SCMP, Futunn | February 26, 2026

China’s leading x86-compatible chip designer Hygon Information Technology reported 2025 revenue of ¥14.376 billion (~$2.1 billion), up 56.9% YoY, with net profit reaching ¥2.54 billion (+31.7%). The company also issued a bullish Q1 2026 forecast: revenue of ¥3.91–4.22 billion, implying 63–76% YoY growth, accelerating from the already-strong FY2025 pace. Hygon attributed the growth to “continued rise in demand for domestically produced high-end chips” as public and private sector customers intensify engagement with domestic suppliers. The company’s DCU accelerators — CUDA-compatible general-purpose GPUs — are now deployed across finance, telecoms, government, and internet sectors. In December, Hygon formally launched its “Dual-Chip Strategy” combining Hygon CPUs and DCU accelerators to provide full-stack domestic computing power. With Nvidia generating zero China revenue and the H200’s path to market still unclear, Hygon’s growth trajectory illustrates how export controls are redistributing market share toward domestic incumbents faster than many in Washington anticipated.
Full Article (SCMP)

4. Shanghai Composite Holds Near 4,150 as Tech Rebounds Post-Nvidia Earnings, New Energy Drags
Source: Trading Economics | February 27, 2026

The Shanghai Composite closed at 4,148 on Thursday, essentially flat (+0.03%) as gains in technology stocks offset losses in new energy and metals. AI and computing names extended a second-day rebound, with Range Intelligent Computing (+17.7%), Suzhou TFC Optical (+8%), and Victory Giant (+7.8%) leading the charge — buoyed by Wall Street’s positive reaction to Nvidia’s earnings beat and easing concerns about an overheated global AI trade. On the other side of the ledger, CATL fell 4.5%, Sungrow Power dropped 5.5%, and China Northern Rare Earth lost 2.2% after reports that the Trump administration plans to use a Pentagon AI programme to set reference prices for critical minerals. The divergence between AI winners and commodity losers underscores the market’s ongoing sectoral rotation: investors continue to reward companies positioned on the AI value chain while taking profits in cyclical sectors exposed to geopolitical overhang. Year-to-date, the Shanghai Composite remains above the psychologically significant 4,000 level that it reclaimed in early January.
Full Article (Trading Economics)

Editor: Charriot Zhai