Daniel Slotta
Research expert covering Greater China
Generative AI in China - statistics & facts
In the shadows of Silicon Valley’s AI giants, Chinese companies are quietly engineering a technological ecosystem that could shape the global artificial intelligence landscape. The central government in Beijing has stated for years that the development of domestic artificial intelligence capabilities is a key policy objective. Together with a large-tech sector and a tech affinity among the population, China was primed to become a hotbed for generative AI applications and companies. Since the large language models and image generators have found their way into the mainstream, Chinese companies have been building a domestic GenAI ecosystem, straddling between government oversight and pressure from a fast-paced and competitive industry.
Business as usual
The emergency of a new industry in China often follows a similar playbook. First, the government restricts access to the Chinese market for overseas competitors and then fosters the development of domestic companies while maintaining a tight grip on the industry. In the case of generative AI, most western products, such as OpenAI’s ChatGPT, are not available in mainland China, eliminating competition for Chinese companies. However, at the same time, the cybersecurity administration requires the registration of AI models before publication and has a set of approved training material to “reflect socialist core values.” This double-pronged approach is challenging for individual companies but ensures the success of the overall industry.Competition in the GenAI space
Not too dissimilar to the United States, the generative AI industry in China consists of a wild mix of legacy companies and newcomers alike. All major Chinese tech companies are heavily invested in the artificial intelligence-generated content segment, either with their product or through strategic investments in smaller companies. For instance, the internet company Baidu operates a ChatGPT equivalent called Wenxiaoyan, ByteDance has Doubao, and Alibaba cloud runs Tongyi. Newcomers in the tech-ecosystem include Moonshot AI and Minimax, however both companies received backing from large players in the industry, such as Tencent and Meituan. It is ab oversaturated market, where companies engage in an aggressive price war in an attempt to squeeze out the competition. In this abrasive environment, only companies with deep pockets will be able to prevail.The future of GenAI in China
The Chinese generative AI industry gives very mixed signals. Firstly, it faces the same question that every AI company has: what is the long-term perspective? Can the industry find a commercially viable business model, and how much growth is actually driven by hype? In addition, how much will the strict regulatory environment impact the innovative capacity of companies? Since generative AI in China is still in the early stages, it is hard to make any predictions, but the domestic industry has the potential to play a role in the global GenAI market.Daniel Slotta
,
Feb 13, 2025
Daniel Slotta
Research expert covering Greater China
