China’s major tech companies are uniquely positioned to capitalize on the shift to real-world applications for AI.
Amid discussions of multipolarity at the Munich Security Conference and calls for collaboration in artificial intelligence (AI) safety by Chinese leaders at the Paris AI Summit, tech firms and investors in China saw a volatile yet promising week in AI innovation. Both domestically, with Xi’s symposium with China’s top tech leaders, and internationally, China’s most senior leadership is taking a stance that they embrace AI and tech development and are open to global collaboration.
Chinese A share and ADRs responded with a rally this past week, largely driven by the confidence seen at these events and the news of governmental support for AI and big tech. This was coupled with strong signals from Chinese leadership encouraging entrepreneurship and technological advancement.
At the Munich Security Conference, Chinese Foreign Minister Wang Yi invoked a metaphor from Jin Yong’s martial arts novel “The Heaven Sword and Dragon Sabre”: “Let the strong do as they will; we remain as unperturbed as the gentle breeze caresses the hills. Let the fears act as they may; we maintain our poise as the bright moon illuminates the river.”
This rhetoric highlights China’s non-confrontational resilience – a refusal to be swayed by external pressures while advocating for “mutual respect and win-win cooperation.” Ultimately, this implies that China will continue to focus on its growth, but with a preference for collaboration over confrontation.
This signaling from Beijing comes at a pivotal moment in the global AI landscape. DeepSeek’s breakthrough R1 model represented more than just a milestone in China’s artificial intelligence landscape – it marked a breakthrough in global AI innovation. As an open-source solution, R1 has already been adopted by both China’s tech giants – including Tencent, ByteDance, Huawei, and Alibaba – and U.S. platforms such as Perplexity and Microsoft Azure AI Foundry.
This development signals a shift in our perception of AI innovation, from an obsession with creating ever-more advanced models to focusing on real-world applications. China’s major tech companies, equipped with vast user bases and sophisticated engagement ecosystems, are uniquely positioned to capitalize on this shift. The “super-app” mentality of Chinese tech firms and their ability to initially replicate and subsequently innovate could reshape the global technology landscape with the advent of an AI super-app.
Open Source Meets Super App DNA
China’s AI sector has often been perceived as trailing U.S. giants like OpenAI, Anthropic, Meta, and Google. However, DeepSeek’s R1 model challenges this narrative by delivering comparable performance in coding, mathematics, and natural language reasoning – all at a fraction of the cost. This efficiency has shifted perspectives on AI development, proving that “bigger is not always better” and accelerating timelines for training and deployment.
Mark Zuckerberg’s vision of a “1 billion-user AI assistant” depends heavily on Meta’s vast data ecosystem. Yet China’s super-app giants – Tencent (1.3 billion WeChat monthly active users), ByteDance (800 million Douyin daily active users), and Alibaba (900 million monthly active users) – boast deeper integration into daily life. These platforms are uniquely positioned to embed AI into diverse consumer touchpoints.
