Over 600 million residents in China have already used various AI applications. The pace of technology integration into daily life is astonishing, reports The Economist.

"The country is rapidly moving towards a future where artificial intelligence will select, purchase, and deliver many goods and services, fundamentally transforming the digital economy," the article states.

The publication notes that to order coffee in an office in Shanghai, one only needs to ask an app to choose a drink on their behalf and confirm the order—it will be on its way immediately.

However, outsourcing such decisions comes with risks. A journalist from The Economist requested a "special" coffee and received a drink that tasted like vinegar with rose petals.

The Third Internet Era

Chinese internet users have experienced two eras of internet development:

  • In the early 2000s, most users relied on the Baidu search engine;
  • After Google exited the market at the end of the decade, Baidu became a monopoly and aggressively monetized its services, leading to user dissatisfaction. With the rise of smartphones, users migrated to super apps—applications that combine shopping, entertainment, communication, and payments.

This shift has allowed major tech companies like Alibaba, ByteDance, and Tencent to build extensive portfolios of digital services and logistics networks, which can be leveraged to create autonomous solutions for various user tasks.

Any of these tech giants could emerge as a leader in the new era of Chinese internet. The chaotic competition in the AI sector has already begun, according to The Economist.

On May 11, Alibaba fully integrated its chatbot Qwen into its shopping app Taobao, enabling users to purchase a wide range of goods and services with simple commands.

ByteDance is preparing for a similar release, merging Doubao with Douyin.

Tencent has emerged as a "dark horse" in this race. Initially, its investments in AI models were modest, but in the past six months, it has completely restructured its AI team.

The company's new model—Hy3—is currently in testing and showing promising results. Tencent is gradually integrating it into WeChat.

AI-Powered Super Apps

AI-based super apps could become an attractive growth source during a period of low consumer spending in China.

Alibaba's adjusted operating profit for its e-commerce division fell by 40% in the first quarter of 2026 compared to the same period last year. While the company's cloud business is thriving, this growth requires substantial capital investment.

Chinese tech giants claim their AI super apps do not promote advertised products. However, they may need to change their policies, The Economist suggests.

Protective Measures

Chinese companies may be wary of AI devices with built-in agency functions in their operating systems that could displace super apps.

OpenAI is working on such a device. The new product is capable of fully understanding the user's environment and life. It is unobtrusive, can be kept in a pocket or on a desk, and "will become the third main device after the MacBook Pro and iPhone."

ByteDance attempted a similar release in December, launching a smartphone with a pre-installed AI assistant in collaboration with electronics manufacturer ZTE. The project failed partly because Alibaba and Tencent blocked access to their payment platforms.

In March, Xiaomi announced the release of new AI models that will be integrated into smartphones and cars. Huawei may also join this competition.

As the Chinese internet enters a new era, a fierce battle for dominance looms, The Economist concludes.

Recall that in August 2025, China set goals for national AI integration.