New Delhi, Oct. 19 -- China's rapidly expanding artificial intelligence (AI) data centre sector is facing growing pressure to demonstrate profitable returns on investment as rising financing costs and investor concerns shift attention from capacity expansion to capital efficiency, according to a Goldman Sachs research report.

The report said stronger-than-expected demand for AI infrastructure has improved the medium-term growth outlook for Chinese data centre operators.

However, as new orders translate into long-term contracted capacity, the sector is increasingly being judged on its ability to generate returns that exceed the cost of capital.

Highlighting the changing investment environment, Goldman Sachs said, "the next stage of Chin...