<div id="readability-page-1"><span></span><div><p>BEIJING — Chinese companies are accelerating the rollout of new artificial intelligence models as competition with U.S.-based rivals OpenAI, Anthropic and Google intensifies.</p><p>Just over a year ago, China-made DeepSeek rocked global markets with the release of an AI chatbot that undercut OpenAI's ChatGPT on usage fees and production costs, raising questions about the efficacy of U.S. tech restrictions on China.</p><p>On Tuesday, Beijing-based startup Moonshot AI revealed Kimi K2.5, which claimed to have video-generation and agentic capabilities that outperformed all three of the leading U.S. AI models. Agentic AI broadly refers to AI systems capable of carrying out tasks on behalf of people. The ultimate goal is to have sophisticated agents that work autonomously with minimal user interaction.</p><p>The update came just about three months after Moonshot released its K2 model.</p><p>Hours earlier, e-commerce giant <span id="RegularArticle-QuoteInBody-2">Alibaba<span><span id="-WatchlistDropdown"></span></span></span> announced its latest generative AI model, which can create text, pictures or video based on user commands. Alibaba claimed its Qwen3-Max-Thinking outperformed major U.S. rivals on a broad benchmark test called &#34;Humanity's Last Exam.&#34; </p><p>Alibaba said the new model can automatically select the best AI tool for a range of tasks and draw on past conversations as context to generate new responses more efficiently, all at little additional cost.</p><p>A week earlier on Jan. 19, Z.ai released a free version of its recently launched GLM 4.7 model. Two days later, the company restricted new subscribers from signing up for its AI coding tool after demand strained its available computing power.  </p></div><div><p>Also last week, Hong Kong-traded shares of <span id="RegularArticle-QuoteInBody-6">Chinese tech giant Baidu<span><span id="-WatchlistDropdown"></span></span></span> climbed to their highest level in nearly three years following the release of its latest generative AI model, Ernie 5.0. The company claimed the update outperformed Google's Gemini-2.5-Pro, but did not compare it with Google DeepMind's newest Gemini 3 Pro.</p><p>Demis Hassabis, the CEO of Google DeepMind, told CNBC this month that China's AI models may be just &#34;months&#34; behind those developed in the U.S. </p></div><h2>Trying other ways to compete</h2><div><p>Beyond the rollouts, Chinese companies are pushing the adoption of homegrown technologies by making them more affordable for emerging economies.</p><p>Unlike many leading U.S.-developed AI models, those from China tend to be open-sourced, typically allowing free or low-cost access and the ability to customize the model's underlying code.</p><p>&#34;The hope is countries apart from China will use these models to ensure large amounts of applications are built on these Chinese models,&#34; said Alex Lu, founder of LSY Consulting. &#34;That's one way for Chinese companies to penetrate the market.&#34;</p><p>There are indications that the trend is already happening. Microsoft earlier this month noted estimates that DeepSeek usage in Africa is two to four times higher than in other regions. </p><p>Paying too much attention to AI benchmarks distracts from the tech's real value — when it is integrated into existing gaming or entertainment ecosystems such as <span id="RegularArticle-QuoteInBody-12">Tencent's<span><span id="-WatchlistDropdown"></span></span></span>, Ivan Su, senior equity analyst at Morningstar, said in a note. </p><p>The Chinese tech giant operates the ubiquitous WeChat messaging app as well as other popular gaming and video streaming apps in China.</p><p>Tencent on Sunday announced that it will distribute 1 billion yuan ($140 million) in cash awards through its Yuanbao AI chatbot app during the Lunar New Year festival in February. The promotion mimics earlier &#34;red envelope&#34; campaigns that helped WeChat become one of the two dominant mobile payment apps just over a decade ago. It is customary for families to give relatives cash in small red envelopes during the holiday.</p><p>ByteDance and Baidu are also running AI-related promotions around the upcoming holiday in a bid to retain users on their AI applications.</p></div><div><div>  <div id="tcc-wrapper">  <div>   <p><img src="https://imageproxy.pbkrs.com/https://fm.cnbc.com/applications/cnbc.com/resources/styles/skin/special-reports/the-china-connection/tcc_widget_logo_2026.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="278" height="79" original-src="https://imageproxy.pbkrs.com/https://fm.cnbc.com/applications/cnbc.com/resources/styles/skin/special-reports/the-china-connection/tcc_widget_logo_2026.png"/>   </p>   <div>    <p>Weekly analysis and insights from Asia's largest economy in your inbox<br/>    Subscribe now</p>   </div>  </div> </div></div></div><div><p>Earlier this month, Alibaba updated its Qwen AI app to encourage users interacting with the chatbot to shop, order food and pay without leaving the app — thanks to integration with the company's existing e-commerce platforms such as Taobao. Qwen claims more than 100 million monthly active users.</p><p>This integration could generate more revenue for Alibaba, on the assumption that the greater the number of people who use Qwen, the more they will use Taobao and shop on it, Lu said. That would help offset the costs of developing and running the underlying AI model, he said.</p><p>Chinese companies are mostly competing for user traffic rather than developing the most advanced models, he said.</p></div></div>

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<p>Chinese companies are rapidly launching new AI models to compete with U.S. rivals like OpenAI and Google. Notable releases include Moonshot AI's Kimi K2.5 and Alibaba's Qwen3-Max-Thinking, both claiming superior capabilities. The trend reflects a push for affordable, open-sourced technologies aimed at emerging markets. Tencent is promoting its AI chatbot with cash awards during the Lunar New Year, while Alibaba integrates its AI with e-commerce to boost user engagement. Overall, the focus is on user traffic rather than solely on model advancement.</p>

- Chinese companies are rapidly advancing artificial intelligence models to compete with U.S. companies like OpenAI and Google.  
- Recent releases include Moonshot AI's Kimi K2.5, Alibaba's Qwen3-Max-Thinking, and Baidu's Ernie 5.0, all claiming superior capabilities over U.S. rivals.  
- These models are often open-sourced and affordable, promoting adoption in emerging markets while focusing on user engagement rather than solely on technological advancement.

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One year after DeepSeek, Chinese AI firms from Alibaba to Moonshot race to release new models