Competition in China's AI market is shifting from developing increasingly powerful models to finding ways to monetize and apply them practically. This was stated by Alex Yao, head of Chinese equity research at JPMorgan.
According to him, the so-called "war of a hundred models," which has defined the sector's development for several years, is gradually coming to an end. The market is consolidating around a limited number of major players capable of transforming consumer AI products into reliable corporate infrastructure.
Utility Takes Center Stage
Yao noted that while Chinese models may still lag slightly behind leading American counterparts in certain metrics, this is becoming less of a decisive factor for commercial success domestically. The ability of technology to solve real business problems is far more important.
In the analyst's view, models have already reached a level where they can perform a significant portion of intellectual work. The key question now is not further productivity growth, but rather creating products that users and companies are willing to pay for.
Chinese Companies Testing New Monetization Models
Major tech platforms have already begun transitioning to paid services. Yao cited ByteDance's AI app Doubao, which launched several subscription plans in May, priced from 68 to 500 yuan per month (~$10-$74).
The expert believes concerns about Chinese users' reluctance to pay for software are exaggerated. He stated that demand will primarily depend on the services' ability to demonstrate tangible value to customers.
Winners Will Be Determined by the Corporate Market
JPMorgan expects that the next phase of development for Chinese AI will be linked to corporate products, process automation, and the integration of AI into existing digital ecosystems. Bank analysts believe the industry is shifting from competing on model quality to vying for real revenue sources and long-term competitive advantages.
As the market consolidates, companies that can not only create advanced models but also build sustainable business models around them, focused on corporate clients and practical technology applications, will gain an advantage.
Recall that Microsoft CEO Satya Nadella proposed a new perspective on the future of companies in the AI era in a recent article.