These Chinese AI Companies Could Be The Next DeepSeek
DeepSeek's rapid growth has drawn attention to the artificial intelligence sector in China. Several other notable Chinese AI companies are also gaining traction and deserve attention. These companies are poised to make significant strides in the field of AI technology. Investors and industry observers are closely monitoring their progress. Keep an eye on these emerging Chinese AI firms for future developments.
Illustration by Fernando Capeto for Forbes; Icons by Ruby/Noun Project
The Rise of Chinese AI
In January, a little-known Chinese AI lab named DeepSeek rocked the world when it released an advanced open source model that rivaled those of US tech giants, seemingly using a fraction of their resources. A who’s who of AI’s juggernauts, from OpenAI to Anthropic, lauded the company’s achievements while defending their own progress and methods. President Donald Trump called it a “wake-up call.”
But beyond that viral moment, spun up by AI’s own frothy hype cycle and a frenzy of geopolitical concerns, DeepSeek’s emergence had a deeper impact: It put the spotlight on Chinese AI, and gave it a face on an international stage. DeepSeek and other Chinese companies were not included on the AI 50 list, which honors the most promising privately-held companies in artificial intelligence, because their financials and business practices are opaque. But they are worth highlighting as many of them make significant impacts beyond China, thanks to an emphasis on open source models made freely available for anyone to use.
Many of the Chinese AI models gaining traction are made by the country’s tech giants. There’s video generation app Hunyuan owned by tech conglomerate Tencent, the $92 billion (2024 revenue) maker of WeChat. The company claims its recent “reasoning” AI models, which can answer complex questions by breaking them into smaller sub-questions, outperforms DeepSeek’s flagship models. Then there’s Doubao, a consumer-focused app from TikTok parent ByteDance, which has built spatial models that analyze physical environments and generate 3D landscapes. There’s also Qwen, a family of large language models from the ecommerce behemoth Alibaba, which has amassed more than 90,000 enterprise users on the company’s cloud platform.
Chinese Startups Making Waves
DeepSeek’s meteoric rise opened the floodgates for other Chinese startups. In March, Wuhan-based startup Butterfly Effect launched an AI system called Manus, which it claims can autonomously browse the web and do things like search for apartments, analyze stocks and design websites. The tool has some pitfalls, ranging from making incorrect assumptions about the task at hand to crashing while processing large amounts of text. But its release was praised as an emerging rival to OpenAI’s service, Operator.
China has been making significant leaps in humanoid robotics too. Agibot, founded in 2023 by former Huawei “genius youth” recruit Peng Zhihui, claims it has already manufactured over 1,000 AI-powered bipedal robots and reportedly plans to grow that number to 5,000 robots by the end of the year, in a bid to match Elon Musk’s plans for Tesla’s general purpose robot Optimus.
China's AI Advancements and Global Impact
China’s gains in AI are driven in part by an emphasis on academic research and open source publishing at universities. In 2018, China said it wanted to be the leader in AI by 2030, and marshaled significant academic resources toward that goal. Now the country is producing most of the world’s AI research. As of 2023, it accounted for about 70% of all granted patents and produced 23% of the world’s AI publications and citations.
So far the strategy is working. Earlier this week, HAI released its annual AI Index, which shows the AI race between the U.S. and China narrowing. The U.S. is still producing most of the world’s cutting edge AI, with U.S. companies releasing 40 “notable models,” defined as “particularly influential models within the AI/machine learning ecosystem.” China, in second place, released 15 such models. And the country is closing the gap in model performance: Two years ago, the U.S. led by double-digit points on various benchmark tests. Last year, China reached “near parity,” according to HAI.
The country’s open-source approach, which lets anyone download the model and build applications with it, has made it easy for Chinese companies to have a global impact.
Meanwhile, given the country's strong cultivation of AI talent at its universities and support for R&D, there is a lot of promise not just in DeepSeek and its current cohort, but what follows them. “What I think is more interesting is the company you don't know about right now, and you might hear about a year or two from now.”