(SINGAPORE 14.10.2025）China’s AI penetration far outpaces the global average, but few local AI tools startups have achieved the kind of impact seen in foreign counterparts like Perplexity or Runway. The dominance of tech giants like Alibaba’s Quark (夸克) 、Bytedance’s Doubao (豆包) and Baidu’s Baidu Netdisk (百度网盘) in China has accelerated the country’s AI progress, but that has also left little room for small innovators to grow, Chinese media pointed out.
With large tech companies holding sway in the domestic market, moving overseas has become nearly the only option for little Chinese AI startups to grow, observed Wuyazhineng (乌鸦智能), a Chinese platform focusing on AI issues. The platform cited Manus, which relocated its headquarters to Singapore in July, as one prominent example.
Abandoning plans to launch its products in China, Manus (蝴蝶效应) has also set up branches in the US and Japan. Of its original 120-strong team in China, 40 core technical persons had been transferred out of China while majority of the rest were laid off.
Prior to Manus’ departure, HeyGen (嗨生成) had moved its headquarters from Shenzhen to Los Angeles, and Lovart (洛瓦特) to San Francisco. All these shifts were driven not only by limited spending power of Chinese consumers but also the highly competitive environment in China, Wuyazhineng remarked.
For example, Kimi (基米) previously made headlines with China’s first “2-million-Chinese-character” textual space, but within just five days, major companies like Alibaba and Baidu quickly rolled out similar functions with even higher character limits, quickly wiping out the gap.
Similarly, Hoshino （星野）went viral with its voice-based community chat, reaching the top 20 on the iOS Entertainment charts. But ByteDance soon responded with a strikingly similar app called “Cat Box” (猫箱) adding a TikTok video co-creating feature.
Chinese tech giants’ swift imitations compress the competitive advantages of Chinese AI startups to mere weeks. In some cases, innovations were overtaken in just three days as alternative products were rapidly launched at lower prices and quickly adopted. At this pace, it is nearly impossible for startups to stay ahead and afloat.
According to QuestMobile, by March of this year, China’s AI apps had 270 million monthly active users, surpassing ChatGPT’s 180 million. But a large pool of users does not ensure sustained success. QuestMobile is a leading Chinese business intelligence firm.
China’s AI market has developed a clear “two-tier structure”: at the top, large tech companies focus on building and controlling entire ecosystems, integrating services, and dominating the overall market.; at the bottom, small startups concentrate on creating new tools or niche products.
The giants enjoy the advantages of gathering and analyzing massive amounts of user information. commanding millions of users, possessing substantial financial resources, and employing highly skilled engineers.
However, they also steadily shrink the room for startups to thrive. The moment a startup feature appears, the tech giants can swiftly match it across functionality, distribution, user traffic, and pricing. So, while the user base in China keeps growing, the wellspring of innovation is narrowing, Wuyazhineng lamented.
On the global Top 50 AI apps chart, only 5 out of 34 come from major tech giants. But in China, this pattern does not hold. Data from the same chart shows that, among China’s top 20 AI apps, 14 — or 70% —are from major tech firms valued over 50 billion yuan (S$9.15 billion). The only startups to make it into the chart’s top ten are DeepSeek and Yess (月之暗面).
Also, the a16z’s Global Top 50 AI Mobile Apps list features 22 Chinese apps, among which 19 focus mainly on international markets. Out of the 22 products, fewer than 10 are major tech firms. This indicates that Chinese startups play the leading role in AI mobile apps. A16z is one of the most influential venture capital firms in the tech world.
Among China’s top AI products, major tech companies are nearly everywhere—ByteDance, Baidu, Alibaba, and iFlytek (科大讯飞) . One major reason is their overwhelming resources. Take ByteDance as an example: in 2024, after committing fully to AI, it launched 11 AI apps in just one year—almost double the number from the previous year.
ByteDance rarely chases “original” ideas; instead, it excels at replicating successful products. Its apps cover all the hottest AI categories on the market, from chat and social networking to image/video, education, and music. Whether it is chat assistants or productivity tools, ByteDance seems to have it all.
AI is undoubtedly changing everyday life on China’s internet, but the leading players in this story will always be the tech giants, concluded Wuyazhineng.
