China's Tech Revolution: Generative AI
Takes Flight

Earlier this year, the world got a taste of Chinese generative artificial intelligence (GenAI) when DeepSeek was released. Similar to US-developed GenAI apps such as ChatGPT, Gemini, and Perplexity, the app was an immediate success, rising to the top of the App Store charts in more than 50 countries including the US. Today, the Chinese app remains popular, with users ranging from universities to multinational organizations such as HSBC and Saudi Aramco¹. It seems DeepSeek’s low costs – which some experts say are up to 95% lower than those of ChatGPT – offer a very compelling proposition for those seeking high-performance AI solutions.

DeepSeek is just the tip of the iceberg when it comes to Chinese generative AI, however. Today, pretty much all of the big tech companies in China have their own unique GenAI applications. And some of these offerings are extremely impressive. Thanks to significant national investment, a vast data ecosystem, and a focus on cost-efficient innovation, Chinese tech companies are developing state-of-the-art AI solutions right now, challenging American superiority and setting the stage for an East versus West AI arms race.

Baidu is Going Open Source

One company that is leading China’s GenAI charge is Baidu. It offers a powerful platform called ERNIE (Enhanced Representation through Knowledge Integration), which currently has around 23 million monthly active users². This chatbot has been free since March³. And since June 30, it has been completely open source⁴.

By going open source and making the code of its flagship GenAI model available to everyone, Baidu is hoping to capture more users and create a thriving developer ecosystem around ERNIE. This could potentially be more profitable than charging for access to APIs. There’s no guarantee that this open-source approach will pay off. However, the strategy does present a risk to American GenAI developers such as OpenAI and Anthropic as well as Chinese AI players such as DeepSeek, who are charging users for access to their top-tier products at present.

Alibaba is Seeing Enterprise Adoption

Another tech company at the heart of the AI boom in China is e-commerce powerhouse Alibaba. It offers the Qwen series of large language models (LLMs), which have been developed by Alibaba Cloud and are also open source. Since its debut in April 2023, the Qwen family has attracted over 300 million downloads worldwide according to Alibaba⁵. And to date, developers have created more than 100,000 Qwen-based derivative models, making it one of the world’s most widely adopted open-source AI model series.

Today, a range of blue-chip multinational enterprises are using Qwen, including the likes of pharma company AstraZeneca, consumer healthcare group Haleon, and makeup giant Shiseido6. These companies are leveraging the technology to better analyze data, innovate, and improve the customer experience. One key attribute of the Qwen platform is its multilingual abilities. Currently, it supports 119 languages and dialects, with leading performance in translation and multilingual instruction-following⁶.

Tencent is Leveraging WeChat

Of course, Tencent – the largest tech company in China by market cap⁷ – is also actively involved in GenAI. Its flagship AI product is the Hunyuan series of models, which is known for its ability to process and understand Chinese language. Where Tencent potentially has an edge over other Chinese tech companies is that it owns WeChat/Weixin – a super-app that offers everything from payments and gaming to social media and e-commerce. WeChat currently has around 1.4 billion monthly active users⁸ and within the app, Hunyuan is integrated via its Yuanbao chatbot. Given the vast number of users, the company has access to an absolute mountain of training data for its AI models.

ByteDance Has Traction

One other Chinese tech giant that is worth highlighting is ByteDance – the parent company of TikTok and Douyin (the Chinese version of TikTok). It owns Doubao, which is one of the most popular GenAI apps in China today⁹. Doubao has been successful because it is integrated into Douyin, meaning that it is visible and accessible to millions of people. It also benefits from Bytedance’s expertise in recommendation algorithms and is able to offer highly relevant and contextualized responses, tailoring the user experience. Additionally, ByteDance has adopted an aggressive pricing strategy, making Doubao's advanced capabilities very affordable. For example, its Doubao Pro model is priced significantly lower than OpenAI's GPT-4¹⁰, and usage costs are reduced for enterprises.

China’s “Six Tigers”

It’s worth pointing out that while large technology companies in China are having success with generative AI, smaller start-ups are as well. So much so that the term "China's Six Tigers" has emerged to describe a group of leading Chinese AI start-ups. These start-ups include:

• Zhipu AI – One of China's earliest GenAI start-ups, it is known for its ChatGLM chatbot and GLM-4 series models.

• Moonshot AI – This company is known for its Kimi AI chatbot, which has gained popularity for its ability to process long queries.

• 01.AI – Known for its Yi series models, this start-up was founded by Kai-Fu Lee, a veteran of Apple, Microsoft, and Google.

• MiniMax – This firm has developed popular AI chatbot apps such as Talkie and text-to-video AI generator Hailuo AI.

• StepFun – Founded by an ex-Microsoft executive, it has gained attention for its multimodal models.

• Baichuan Intelligence – This company has developed several open-source large language models including Baichuan-7B and Baichuan-13B.

All of these companies have been recognized for their advanced AI platforms, strong talent pools, and significant funding rounds from major Chinese tech players. And they are viewed as crucial to China's efforts to become a global leader in AI.

Looking to the Future

Today, OpenAI’s ChatGPT remains the world’s most popular AI consumer chatbot, boasting several hundred million weekly active users¹¹. Meanwhile, American AI is still viewed as the industry’s gold standard. Yet recently, Chinese companies have started to capture market share by offering AI performance that is nearly as good as US technology at vastly lower prices. As a result, the global AI landscape is rapidly evolving.

Note that in June, a study on critical and emerging technologies by researchers at Harvard found that China has advantages in two key building blocks of AI – data and human capital¹². Chinese tech companies such as Baidu and Alibaba further benefit from making their AI models open source, encouraging developers to adopt them. So, the next few years are going to be interesting when it comes to AI. No doubt, China will be playing a pivotal role in the global AI revolution.

Footnotes:

¹WSJ, China Is Quickly Eroding America’s Lead in the Global AI Race, as of July 1, 2025

²Silicon Angle, China’s Baidu declares war on OpenAI and others by open-sourcing Ernie chatbot, as of June 29, 2025

³PR Newswire, Baidu Unveils ERNIE 4.5 and Reasoning Model ERNIE X1, Makes ERNIE Bot Free Ahead of Schedule, as of March 16, 2025

⁴CNBC, China’s biggest public AI drop since DeepSeek, Baidu’s open source Ernie, is about to hit the market, as of June 30, 2025

⁵Alibaba Cloud, Alibaba Introduces Qwen3, Setting New Benchmark in Open-Source AI with Hybrid Reasoning, as of April 29, 2025

⁶Alibaba Cloud, Tongyi Qianwen (Qwen), as of July 7, 2025

⁷Companies Market Cap, Largest Chinese companies by market capitalization, as of July 7, 2025

⁸Statista, WeChat - statistics & facts, as of April 15, 2025

⁹SCMP, Alibaba’s Quark surpasses ByteDance’s Doubao, DeepSeek as China’s top AI app, as of April 13, 2025

¹⁰Tech Node, ByteDance surprises AI rivals with ultra-low cost Doubao model, as of May 16, 2025

¹¹Exploding Topics, Number of ChatGPT Users (June 2025), as of June 24, 2025

¹²Belfer Center, Critical and Emerging Technologies Index, as of June 5, 2025