China’s AI moment: Practical, profitable, poised to go global

In late January 2025, a previously little-known Chinese artificial intelligence company called DeepSeek gained global attention when its R1 model demonstrated competitive performance with leading Western AI systems. But DeepSeek isn’t an outlier — it represents a broader shift as Chinese companies quietly deploy AI solutions that are transforming entire industries. While American companies focus on achieving artificial general intelligence, Chinese firms are building practical AI applications that are already changing how businesses operate across retail, transportation, education, healthcare, and manufacturing. For global businesses, the question isn’t whether Chinese AI will impact their industries — it’s whether they’ll recognize the competitive threats and opportunities before their rivals do. AI that actually sells Chinese e-commerce platforms are pioneering AI integration that fundamentally changes consumer expectations. According to company reports, Taobao Live uses AI to generate real-time product recommendations during livestreaming broadcasts, analyzing facial expressions, comments, and engagement patterns to suggest products viewers are most likely to purchase. Tencent’s WeChat Pay has reportedly integrated AI shopping assistants that handle shopping conversations, while JD.com’s AI-powered customer service assistant has allegedly increased satisfaction scores while reducing operational costs, according to the company. Xiaohongshu (also known as RedNote) has deployed AI-powered virtual try-on technology for beauty products, and Pinduoduo’s AI recommendation engine now reportedly drives the majority of purchases on the platform. Chinese AI companies are setting new standards for personalized e-commerce experiences. When consumers become accustomed to AI-powered personalization and convenience, traditional platforms face pressure to match these capabilities or risk losing market share. Autonomous industry: Beyond self-driving cars BYD, the world’s largest EV manufacturer, has integrated AI fleet management systems across commercial vehicles in China, according to company reports. The systems allegedly reduced fleet operational costs while increasing vehicle utilization rates. BYD’s battery production facilities use AI to predict battery performance, reducing warranty claims. Baidu’s Apollo Go operates autonomous ride-hailing services across Beijing, Shanghai, Shenzhen, and Wuhan, completing millions of rides according to the company. In Wuhan, Apollo Go completes thousands of rides daily at prices below traditional taxis while maintaining high customer satisfaction ratings. Didi Chuxing uses AI to optimize ride-sharing routes for hundreds of millions of users, according to the company, while Nio’s AI-powered battery swap stations complete battery changes in under three minutes across thousands of locations. Chinese autonomous systems are demonstrating that AI can operate transportation networks more efficiently than traditional models. As Chinese companies expand internationally, conventional transportation providers face competitive pressure on both pricing and service delivery. Education: AI teachers for mass scale iFlytek’s AI teaching assistants operate in tens of thousands of schools, processing millions of daily student interactions, according to company reports. Its Smart Education platform has improved English pronunciation scores and reduced teacher grading time significantly. ByteDance’s educational AI systems serve over 100 million students through Volcano Engine Education, according to the company. The AI tutoring has allegedly increased learning outcomes compared to traditional methods, with particularly strong results in rural areas where educational gaps have been reduced. TAL Education Group uses AI to provide personalized learning paths for millions of students, while Squirrel AI has deployed personalized tutoring across thousands of learning centers, serving millions of students according to company reports. Chinese AI education tools are demonstrating cost-effective, scalable personalized learning at unprecedented scale. This sets new benchmarks for educational software and services worldwide, potentially disrupting traditional educational markets. Healthcare: AI hospitals and diagnostics DeepSeek’s medical AI operates in major hospitals across China, processing medical images monthly, according to reports. At West China Hospital, the AI has reportedly reduced cancer detection time from hours to minutes while improving accuracy. Ping An Good Doctor, China’s largest online healthcare platform, serves hundreds of millions of registered users with AI-powered consultations. The AI reportedly handles the majority of initial consultations without human intervention, reducing wait times significantly while maintaining high patient satisfaction rates. Tsinghua University’s Agent Hospital operates with AI doctors and nurses, allegedly achieving high accuracy on medical licensing exams and processing thousands of patient consultations with significant efficiency improvements, according to institutional reports. Chinese AI diagnostic tools are becoming increasingly sophisticated and cost-effective, potentially disrupting traditional medical device and software markets globally, especially in emerging markets where cost and efficiency are critical factors. Manufacturing: Smart factories to lead global production China has developed advanced “dark factories” — fully automated manufacturing facilities that operate continuously without human workers or lighting. Foxconn leads this development, reportedly replacing tens of thousands of workers with robots and planning to automate significant portions of operations. Xiaomi’s dark factory in Changping reportedly produces one smartphone per second in complete darkness, using AI and robotics to eliminate human error. Haier’s CosmoPlat industrial internet platform connects hundreds of thousands of enterprises globally, using AI to optimize production and reduce costs according to company reports. Dark factories represent the evolution of manufacturing efficiency, where Chinese companies can produce goods continuously at cost and precision levels impossible for traditional factories. This creates competitive advantages that force global manufacturers to adopt similar automation or accept permanent disadvantages. Financial services: AI-powered fintech Ant Group’s AI credit system has processed billions of loan applications, with users receiving instant credit decisions through Alipay, according to company reports. Default rates have allegedly dropped significantly while extending hundreds of billions in credit to small businesses. Tencent’s WeChat Pay AI fraud detection processes billions of daily transactions, reportedly preventing significant fraud losses. China Merchants Bank reported substantial reductions in false fraud alerts after implementing Tencent’s AI, improving customer experience while maintaining security. Additionally, China’s tech giants are lobbying the People’s Bank of China to approve yuan-backed stablecoins, marking a strategic shift to challenge U.S. dollar dominance in digital payments. China’s stablecoin initiative is a direct challenge to U.S. financial hegemony in digital currency. If successful, yuan stablecoins could provide alternatives to dollar-dominated digital payments, potentially reshaping global trade finance and reducing dependence on U.S.-controlled financial infrastructure. Strategic approaches: The China model Most successful Chinese AI companies pursue dual-track strategies: maintaining strong domestic positions while building international capabilities. Alibaba continues investing in Chinese AI infrastructure while expanding global cloud and AI services. ByteDance operates TikTok internationally while developing AI applications primarily in China. This approach enables companies to benefit from China’s AI ecosystem advantages — vast datasets, rapid iteration cycles, and government support — while building global market presence. What’s next: Staying ahead Based on current development patterns, global businesses should prepare for several breakthrough moments in the coming months: Autonomous AI agents Chinese companies are developing AI systems that can handle complex business processes end-to-end, from customer service to operational management with minimal human oversight. Cross-language AI Chinese firms are investing in AI systems that operate seamlessly across languages and cultural contexts, enabling rapid international expansion of Chinese AI services. Industry-specific AI Rather than pursuing general-purpose AI, Chinese companies are developing highly specialized systems for specific industries, potentially disrupting established business models in finance, logistics, and professional services. Strategic Recommendations Monitor developments systematically: Establish regular monitoring of Chinese AI companies, research publications, and deployment announcements. Breakthrough applications often emerge from China’s ecosystem before gaining global attention. Evaluate practical applications: Consider Chinese AI solutions for non-sensitive applications where cost and performance advantages may be significant, particularly in competitive markets. Prepare for efficiency competition: Chinese AI companies consistently prioritize efficiency and practical implementation. Businesses should evaluate whether current AI strategies can compete with more cost-effective alternatives. Build adaptive capabilities: The rapid pace of Chinese AI development means competitive advantages can emerge quickly. Companies need capabilities to rapidly evaluate, adopt, and integrate new AI technologies as they become available. The Chinese AI revolution is already underway. The companies that understand and engage with these developments today will be better positioned to compete in an AI-driven future. Those that ignore these developments risk being caught off guard by the next breakthrough that reshapes their industry. Read more: How will luxury use AI in 2025? Tapestry uses Gen AI to supercharge digital twin design New AI startup authenticates sneakers by smell

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China’s AI moment: Practical, profitable, poised to go global