Morgan Stanley estimates China's consumer AI market will reach ¥294 billion by 2030, driven by strong mobile internet and AI integration.
Morgan Stanley forecasts that the consumer artificial intelligence (AI) market in China will reach ¥294 billion (around $44 billion) by 2030, as detailed in a report referenced by Tiger Brokers. The report, titled "Consumer AI in China: Beyond the Chatbot Battle," highlights China's leadership in this sector, driven by a strong mobile internet infrastructure and extensive integration of AI into daily life.
The monetizable market for consumer AI is expected to grow from approximately ¥54 billion in 2026 to ¥294 billion by the end of the decade. Notably, the majority of this revenue—about 99%—will stem from advertising and commissions linked to AI-driven purchases and recommendations. Transaction fees alone are projected to generate about ¥281 billion, while advertising will contribute around ¥10 billion, with subscriptions and individual AI features yielding only about ¥3 billion.
High Adoption Rates in China
China's consumer AI user base is significant, with a survey from AlphaWise indicating that 80% of respondents use AI for personal tasks at least weekly, compared to 54% in the U.S. Among working individuals, 77% utilize AI technology weekly for job-related tasks, and 64% have engaged with at least five different AI tools in the past month. This widespread adoption is attributed to the unique characteristics of China's internet ecosystem, where AI is deeply woven into social media, e-commerce, and payment systems.
However, the survey conducted by AlphaWise was limited to around 2,000 consumers aged 18 to 59 from various cities, and the timing of the surveys in the U.S. and China differed, which may affect the comparability of results.
Evaluating AI Ecosystems
As of July 2026, Morgan Stanley reports that the largest Chinese AI applications will have substantial user bases, including Doubao with 399 million users, Qwen with 161 million, DeepSeek with 124 million, and Yuanbao with 51 million. Analysts emphasize that AI services should be assessed not just by monthly active users (MAU) but also by user retention, task completion, and how effectively inquiries are converted into commercial transactions.
Companies with established traffic, data, and payment infrastructures, such as WeChat or Taobao, have a competitive edge over standalone applications, as they can seamlessly connect user queries to relevant products or services. About 75% of survey participants find embedded AI features useful, and 57% believe these features could lead to more frequent purchases. However, the study also notes a decline in the percentage of users who have paid for AI services, dropping from 41% to 35%. Only 21% of respondents prefer subscriptions as a payment method, with an average willingness to pay of ¥41 (approximately $6) per month.
Key Players: Tencent and Alibaba
Tencent and Alibaba play pivotal roles in this evolving landscape. Tencent's WeChat remains a vital asset, integrating social functions, mini-programs, and payment systems. Meanwhile, Alibaba's strength lies in the combination of its Qwen AI, cloud infrastructure, e-commerce, and payment services. The report also explores the potential of vertical platforms like Meituan, suggesting that AI could enhance recommendations and directly link them to available products for ordering.
Nevertheless, analysts warn that increased AI inquiries could lead to higher computing costs, and competition for users may not be sustainable if operational costs exceed revenue gains. Therefore, the study recommends evaluating businesses based on user engagement, task completion rates, conversion of inquiries into purchases, and cash flow after capital expenditures. UBS analysts predict that major Chinese internet companies will begin to capture a larger share of AI profits within the next two to three years.
