Chinese AI Firms Accelerate Model Releases to Challenge US Dominance

Chinese tech firms are rapidly rolling out new artificial intelligence models, intensifying competition with U.S. rivals like OpenAI, Anthropic, and Google. Just over a year after the release of DeepSeek, which undercut ChatGPT on costs, companies such as Moonshot, Alibaba, and Baidu are unveiling advanced AI systems that claim to outperform leading U.S. models.

Moonshot AI Unveils Kimi K2.5

Beijing-based startup Moonshot AI has announced its latest model, Kimi K2.5, which boasts video-generation and agentic capabilities. The company claims these features surpass those of the top U.S. AI models. Agentic AI refers to systems capable of performing tasks autonomously with minimal user interaction. This update comes just three months after the release of Moonshot's K2 model.

Alibaba Launches Qwen3-Max-Thinking

E-commerce giant Alibaba has introduced its new generative AI model, Qwen3-Max-Thinking, which can create text, pictures, or videos based on user commands. According to Alibaba, the model outperforms major U.S. rivals on a broad benchmark test called 'Humanity's Last Exam.' The new system can automatically select the best AI tool for various tasks and draw on past conversations for context, all at a low additional cost.

Baidu's Ernie 5.0 Gains Traction

Shares of Baidu, a Chinese tech giant, have surged to their highest level in nearly three years following the release of its latest generative AI model, Ernie 5.0. Baidu claims the update outperforms Google's Gemini-2.5-Pro but did not compare it with Google DeepMind's newest Gemini 3 Pro. Demis Hassabis, CEO of Google DeepMind, recently stated that China's AI models may be just 'months' behind those developed in the U.S.

Open-Source and Low-Cost Strategies Drive Adoption

Chinese companies are pushing the adoption of their homegrown technologies by making them more affordable for emerging economies. Unlike many U.S.-developed AI models, those from China tend to be open-sourced, allowing free or low-cost access and the ability to customize the underlying code. Alex Lu, founder of LSY Consulting, notes, 'The hope is countries apart from China will use these models to ensure large amounts of applications are built on these Chinese models. That's one way for Chinese companies to penetrate the market.'

Integration into Ecosystems and User Growth

Industry experts emphasize the importance of integrating AI into existing ecosystems rather than focusing solely on benchmarks. Ivan Su, senior equity analyst at Morningstar, states, '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 Tencent's.' Tencent, which operates the popular WeChat messaging app, has announced a Lunar New Year promotion through its Yuanbao AI chatbot app, distributing 1 billion yuan ($140 million) in cash awards. This move aims to replicate the success of earlier 'red envelope' campaigns that helped WeChat become a dominant mobile payment app.

References

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