Chinese language AI corporations earn money

This report is from this week’s version of CNBC’s The China Connection publication, which brings you insights and evaluation on what’s driving the world’s second-largest financial system. Every week, we’ll discover the most important enterprise tales in China, give a lowdown on market strikes and assist you to arrange for the week forward. Like what you see? You may subscribe right here.

AI can now resolve greater than 80% of on-line buyer questions at Toyota’s three way partnership with Chinese language state-owned carmaker FAW, greater than twice as many because it may handle half a yr in the past, Wu Yongjian, vp at Tencent Cloud, instructed me on Friday. Tencent supplies some AI instruments to the automakers.

And now it solely takes round two weeks to get Tencent’s AI customer-service platform up and working, down from as much as three months, Wu instructed me, as we sat inside the corporate’s shiny new workplace in an up-and-coming Shanghai waterfront district.

Over the weekend, Tencent introduced an improve to its Hunyuan AI mannequin alongside releases by different corporations because the “World AI Convention” bought underway within the metropolis.

Whereas not each firm is seeing an analogous demand for his or her services, the give attention to enterprise alternatives displays a shift underway in China in capturing the AI alternative. And that is additionally mirrored in job purposes.

Zhou Yuxiang, CEO of Temasek-backed startup Black Lake Applied sciences, instructed me on Saturday that in the previous couple of months he is been getting resumes from AI mannequin engineers who wish to shift into growing AI for particular trade purposes. “Earlier than it was arduous to get AI engineers,” he mentioned in Mandarin, translated by CNBC.

Black Lake primarily sells AI instruments to small factories in China to assist them pace up manufacturing and higher make the most of capability.

Lots of the enterprise house owners are experiencing “FOMO” proper now as a result of they missed out on the direct-to-consumer e-commerce increase of the previous few years, Zhou mentioned, including that the associated fee to make use of AI has additionally dropped considerably.

Z.ai, previously Zhipu, on Monday grew to become the newest Chinese language startup to slash working prices with an open-source AI mannequin launch. Its pricing undercut Alibaba-backed startup Moonshot’s Kimi K2 mannequin launched earlier this month, and DeepSeek’s R1 in January, which provided decrease charges in contrast with what trade chief OpenAI was charging folks to make use of ChatGPT.

Open supply AI fashions can be utilized free of charge, and even altered and distributed, with out particular permission from the creator. Customers who decide to not obtain the mannequin can entry them by way of the cloud and pay per use.

The startup’s income surged by 88.3% to 242.9 million yuan final yr, DeepExi mentioned in an April submitting with the Hong Kong Inventory Alternate for a deliberate itemizing.

Information labeling, or annotating bits of knowledge for higher AI use, can also be seeing surging demand.

Beijing-based Haitian Ruisheng final week estimated its income within the first half of 2025 grew by no less than 61% from a yr in the past to 148.9 million yuan. Its income in 2024 was almost 240 million yuan.

After excluding objects, revenue is anticipated to have greater than doubled to between 4.5 million yuan and 4.9 million yuan within the first half of the yr, based on the corporate’s submitting with the Shanghai inventory alternate.

Haitian Ruisheng counts ByteDance, Alibaba, Tencent, Baidu and several other U.S. “Magnificent 7” corporations corresponding to Microsoft and Amazon as purchasers, Zhang Zhe, the corporate’s secretary to the board, mentioned in Mandarin, translated by CNBC.

In China, the corporate sees the best monetization alternatives in training, healthcare and tourism, Zhang mentioned, including that there was additionally potential in smartphones and “embodied intelligence” — a class that features robots.

Haitian Ruisheng combines automated information annotation with analysis by human consultants, Zhang mentioned, including that AI requires world cooperation and his firm was eying abroad markets, with a subsidiary in Singapore.

Simply days after the U.S. unveiled its AI motion plan, the Shanghai-based “World AI Convention” opened Saturday with Chinese language Premier Li Qiang asserting plans for a world AI cooperation group. China referred to as for supporting AI integration throughout industries, together with manufacturing, healthcare, training and agriculture.

Tencent has already taken steps in that path.

It has native partnership in Japan for a “digital human service” that home companies should buy, Wu mentioned. That is a digital avatar of a human, usually used for livestreaming and different digital content material.

Different common AI enterprise traces in areas corresponding to Southeast Asia embrace “know your buyer” identification verification for finance, translation providers in addition to a platform for builders to develop AI brokers, Wu mentioned.

With these enterprise tasks — and broader state-backed ambitions — China has clearly gone past the labs within the world AI race.

No U.S.-China commerce truce extension but. A doable extension of a tariff pause between Washington and Beijing is not going to be agreed to till President Donald Trump provides his nod, U.S. negotiators mentioned Tuesday.

Not less than 30 folks die in torrential rain. State media reported the deaths on the outskirts of Beijing after the capital metropolis issued a purple alert for heavy rain on Monday. President Xi Jinping referred to as for extra work on flood prevention and catastrophe reduction within the broader northern area.

China ramps up assist for births. The nation on Monday introduced the equal of about $500 a yr per little one underneath the age of three, following plans to roll out free preschool training.

Mainland China’s CSI 300 rose 0.51%, whereas Hong Kong’s Dangle Seng Index — which incorporates main Chinese language corporations — was 0.45% decrease as of 10:07 a.m. native time (10:07 p.m. ET on Tuesday).

The mainland benchmark has gained greater than 5% thus far this yr, information from LSEG confirmed.