Morgan Stanley Projects China's Consumer AI Market to Reach ¥294 Billion

By 2030, the monetized revenue from consumer artificial intelligence (AI) in China is expected to reach ¥294 billion (approximately $44 billion), according to a report from Morgan Stanley cited by Tiger Brokers.

China currently leads the world in this sector, benefiting from a robust mobile internet infrastructure and deeply integrated applications for daily life, as highlighted in the study titled "Consumer AI in China: Beyond the Chatbot Battle" by the American bank's analysts.

From Chatbots to Transactions

Morgan Stanley forecasts that the monetizable market for Chinese consumer AI will grow from approximately ¥54 billion in 2026 to ¥294 billion by 2030. Notably, around 99% of this potential revenue will come from advertising and commissions on purchases facilitated by AI recommendations and actions.

Transaction fees are expected to account for about ¥281 billion, while advertising will contribute around ¥10 billion. Subscriptions and payments for individual AI features are projected to yield only about ¥3 billion.

China Outpaces the U.S. in AI Adoption

China boasts a significant consumer AI user base. A survey by AlphaWise reveals that 80% of respondents in China utilize AI for personal tasks at least once a week, compared to 54% in the United States.

Among working Chinese users, 77% reported using AI technology weekly for job-related tasks, with 64% having employed at least five different AI tools in the past month.

Morgan Stanley attributes this high adoption rate not only to the popularity of AI models but also to the unique characteristics of China's internet ecosystem, where AI is increasingly embedded in social media, e-commerce, payment systems, and everyday services.

However, it's important to note that the study does not represent the entire Chinese population. The survey included around 2,000 consumers aged 18 to 59 from various cities, and the timing of surveys in China and the United States differed.

Ecosystems as Key Assets

According to Morgan Stanley, as of July 2026, the monthly user base for the largest Chinese AI applications included approximately 399 million users for Doubao, 161 million for Qwen, 124 million for DeepSeek, and 51 million for Yuanbao.

However, analysts suggest that AI services should be evaluated not solely on monthly active users (MAU) but also on user retention, task fulfillment, and conversion of inquiries into commercial actions.

This is why companies with existing traffic, data, payment infrastructure, and access to vendors hold an advantage. For instance, an AI assistant within WeChat or Taobao can immediately link a user’s query to a specific product, service, or payment, while a standalone application must first establish such infrastructure.

Around 75% of survey participants found embedded AI features useful, while 57% indicated that these features could increase purchase frequency.

Morgan Stanley emphasizes that these results reflect user intent rather than confirmed sales growth. Analysts also point out that the proportion of users who have already paid for AI services has decreased from 41% to 35%. Only 21% of respondents preferred subscriptions as a payment method, with an average maximum willingness to pay of ¥41 (about $6) per month.

Tencent and Alibaba's Role

Tencent and Alibaba are particularly significant in this landscape. For Tencent, WeChat remains a crucial asset, integrating social functions, mini-programs, and payment systems. For Alibaba, the combination of Qwen, cloud infrastructure, e-commerce, and payment services is vital.

Morgan Stanley also examines the potential of vertical platforms like Meituan and travel services, noting that AI could not only recommend a restaurant or trip but also directly link the recommendation to available products or services for ordering.

However, analysts caution about the downside of this model. An increase in AI inquiries raises computing costs, and competition for users may not be sufficient if the expenses of inference and promotion outweigh additional revenue.

Thus, the study suggests that key metrics for evaluating businesses should include not only user numbers but also task completion, conversion of inquiries into purchases, user retention, and cash flow after capital expenditures.

It is worth mentioning that UBS analysts predict that Chinese internet giants will start capturing a larger share of AI profits within the next two to three years.