In the ever-changing landscape of technology, the embrace of artificial intelligence (AI) by traditional enterprises is becoming more pronouncedOne such instance involves a key player in the IT sector of a well-established central enterprise in ChinaHere lies the story of how this corporate entity, led by a professional known as Xing Kong Jun, is attempting to apply a new AI tool named DeepSeek within its operations.

Xing Kong Jun and his team are faced with a unique challenge, emblematically representative of traditional corporations grappling with AI integrationThe first major hurdle is the prohibitive cost associated with local deployment of computational resources; running a full-fledged version of DeepSeek can cost upwards of 2 million yuan, especially when factoring in the need for multiple high-end GPUs such as the A100. The second significant issue involves the data security risks that come with utilizing external API connections, which do not conform to the stringent data protection regulations of government enterprises.

Despite the fact that services like DeepSeek's API offered by Silicon-based operational entities are available at relatively cheap rates, the strict data secrecy requirements prevent central enterprises from taking the plungeIn facing these dilemmas, Xing Kong Jun sought out alliances with Chinese Mobile, a major player in the telecommunications industry.

During an engaging discussion with technical professionals from Chinese Mobile, the conversation shifted towards another pressing client engagement concern: the declining conversion rates of traditional SMS and the struggle for AI-based voice call servicesThe experts casually introduced a game-changing solution known as 5G YuexinThe implications of this innovation could potentially transform the way enterprises communicate with their customers.

During practical testing, they discovered that when clients received messages through the 5G Yuexin service, they could effortlessly transition to enterprise WeChat mini-programs or apps, facilitating a more seamless connection

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The affordability of this new service sweetened the deal for corporate adopters.

The operational fulfillment of 5G Yuexin is entrusted to DreamNet Technology, a partner of Chinese MobileThis recent partnership became particularly notable when DreamNet announced its intention to deploy DeepSeek, sparking a surge in its stock price, despite the underlying fact that the application of DeepSeek primarily focuses on internal management optimization without significantly affecting overall sales performance.

DreamNet Technology's business model heavily revolves around cloud communication, generating more than 90% of its revenue through messaging services, which are critical in sectors like finance, e-commerce, logistics, and the internetUnfortunately, between 2021 and 2023, DreamNet experienced consistent financial losses, totaling 2.381 billion yuan, 7.221 billion yuan, and 18.22 billion yuan for each respective yearFactors attributing to these losses include declining brand value, increasing competition, and cost pressures resulting from business adjustments.

However, in a surprising twist, forecasts for 2024 signal a potential turnaround for DreamNet, which is expected to achieve a net profit of between 46 million and 55 million yuanThis anticipated recovery derives from advancements in the 5G Yuexin service, the expansion of international markets, and improved operational efficiencies.

Upon examining their reports, it becomes clear that despite a revenue dip, there has been an unexpected surge in net profit due to overseas business growth and the traction gained from the 5G Yuexin initiativeIn the first three quarters of 2024, DreamNet recorded 3.305 billion yuan in total revenue, representing a slight decline of 0.76% year-on-yearYet, their net profit soared by 491.98%, arriving at a total of approximately 30 million yuan, largely propelled by international expansion and the effectiveness of the new communication platform.

The financial metrics for the first three quarters of 2024 exhibit a significant improvement as well, with DreamNet's operational cash flow amounting to 850 million yuan—up by nearly 200% year on year, signifying impressive strides in collecting payments and streamlining processes

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However, while investments are becoming more cautious, their short-term financing remains a concernAs of the end of Q3 2024, their debt ratio stood at 59.58%, indicating a substantial financial leverage position.

Notably, the high margins associated with the 5G Yuexin service appear to be pivotal for this increase in profitabilityDreamNet's approach has revolved around bolstering cloud communication services and aggressively growing within international marketsCustomer acquisition for the 5G Yuexin service has steadily climbed, showcasing it as a crucial component for navigating profitability.

Further analysis indicates that while DreamNet is indeed venturing into advanced AI applications, it was already effectively utilizing generative AI technologies for content creationCollaborations with various partners have positioned them well in enhancing creative content capabilities, spanning intelligent messaging and specialized models supporting customer service automation.

The alarming reality, however, is that many of the marketing messages received by users are now generated by AI models, which hints at a new competitive landscape where enterprise users engage in large-scale content productionThis invariably poses a challenge for individual creators, reflecting a concerning trend—corporate giants wielding advanced technologies can easily out-compete small players.

Moreover, the deployment of DeepSeek primarily serves to align with the demands of business clients, in a marketplace increasingly driven by personalized experiencesCurrent trends in marketing emphasize individualized approaches, with AI-powered messaging systems capable of delivering tailored content to diverse customer profiles.

Despite the promising developments, multiple risks loom over DreamNetThe first is the challenge of expanding its cutting-edge technologyThe high consumer satisfaction with 5G Yuexin has not directly translated into widespread B2B adoption, a cautionary note raised in the 2024 semi-annual report

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