<div id="readability-page-1">The drive for AI monetisation among Chinese tech companies has become a battle over “delivering measurable business value” rather than raw technical performance, according to Alex Yao, head of China equity research at JPMorgan. China’s AI landscape was rapidly consolidating from a fragmented “hundred-model” battle down to a smaller group of globally competitive leading players, particularly those that could transform consumer-facing features into reliable enterprise-grade infrastructure, Yao said in a recent interview with the South China Morning Post. Although Chinese AI models still lagged slightly behind top-tier US counterparts on certain performance metrics, Yao said this gap was not the decisive factor for domestic commercialisation. This is due to the lack of access to US models within China and the increasing importance of practical utility. “You don’t need a model with the intellect of Einstein,” Yao said. “Once a model reaches the capability of a strong master’s-level graduate, it can start doing real work.” Yao, who also serves as JPMorgan’s co-head of Asia-Pacific technology, media and telecoms research, said concerns over Chinese consumers’ historical reluctance to pay for software may be overstated, arguing that adoption hinged primarily on “clear, demonstrable value”. Monetisation strategies are already taking shape. In early May, ByteDance introduced subscription tiers for its Doubao app, ranging from 68 yuan (US$10) to 500 yuan per month. While Alibaba Group Holding and Tencent Holdings have yet to roll out consumer subscription fees, they are aggressively integrating artificial intelligence into wider software ecosystems. Alibaba opened its Qwen AI ecosystem to partners like KFC and Luckin Coffee, while Tencent is opening WeChat to smartphone AI agents, according to Chinese media reports. Alibaba is the owner of the SCMP. Large consumer internet platforms also saw opportunities to leverage AI to expand their total addressable market, according to Yao. This opened pathways into adjacent, high-value verticals like e-commerce or video gaming, potentially with lower incremental legacy costs than traditional approaches required, he said. However, the real windfall lies in business-facing scenarios. Citing JPMorgan estimates, Yao said the global enterprise AI opportunity was roughly four times the size of the consumer AI segment. AI-assisted software development was currently one of the more visible drivers of monetisation, Yao said. Tech giants such as Alibaba and ByteDance, alongside pure-play AI start-ups such as Zhipu AI, are fiercely competing for this market. In September, Zhipu launched its GLM Coding Plan, pitching it as a more affordable alternative to US services such as Anthropic’s Claude. “While profits may not be immediately evident, the direction of commercial revenue growth is clear,” Yao said.</div>

<p>JPMorgan's Alex Yao states China's AI competition has shifted from technical prowess to delivering measurable enterprise value. The market is consolidating around players offering practical utility, with monetization strategies emerging through subscriptions and ecosystem integration. While consumer adoption faces hurdles, the enterprise AI segment offers a significantly larger opportunity, particularly in software development, driving fierce competition among tech giants and startups.</p>

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China’s AI ‘hundred model’ war shifts to enterprise value, JPMorgan says