Tencent exhibits off its varied AI functions primarily based on its Hunyuan mannequin on the World AI Convention in Shanghai on July 26, 2025.
CNBC | Evelyn Cheng
This report is from this week’s version of CNBC’s The China Connection e-newsletter, which brings you insights and evaluation on what’s driving the world’s second-largest economic system. Every week, we’ll discover the most important enterprise tales in China, give a lowdown on market strikes and show you how to arrange for the week forward. Like what you see? You’ll be able to subscribe here.
The massive story
From startups to tech giants, Chinese language corporations are discovering enterprise demand for his or her synthetic intelligence providers, whilst AI fashions elsewhere preserve burning money.
AI can now resolve greater than 80% of on-line buyer questions at Toyota’s three way partnership with Chinese language state-owned carmaker FAW, greater than twice as many because it may tackle half a 12 months in the past, Wu Yongjian, vp at Tencent Cloud, informed me on Friday. Tencent offers some AI instruments to the automakers.
And now it solely takes round two weeks to get Tencent’s AI customer-service platform up and operating, down from as much as three months, Wu informed me, as we sat inside the corporate’s shiny new workplace in an up-and-coming Shanghai waterfront district.
Over the weekend, Tencent introduced an improve to its Hunyuan AI mannequin alongside releases by different corporations because the “World AI Convention” obtained underway within the metropolis.
Whereas not each firm is seeing the same demand for his or her services, the give attention to enterprise alternatives displays a shift underway in China in capturing the AI alternative. And that is additionally mirrored in job functions.
Zhou Yuxiang, CEO of Temasek-backed startup Black Lake Applied sciences, informed me on Saturday that in the previous couple of months he is been getting resumes from AI mannequin engineers who wish to shift into growing AI for particular business functions. “Earlier than it was onerous to get AI engineers,” he stated in Mandarin, translated by CNBC.
Black Lake primarily sells AI instruments to small factories in China to assist them velocity up manufacturing and higher make the most of capability.
Most of the enterprise homeowners are experiencing “FOMO” proper now as a result of they missed out on the direct-to-consumer e-commerce increase of the previous few years, Zhou stated, including that the price to make use of AI has additionally dropped considerably.
Z.ai, previously Zhipu, on Monday grew to become the bitcoin Chinese language startup to slash operating costs with an open-source AI mannequin launch. Its pricing undercut Alibaba-backed startup Moonshot’s Kimi K2 mannequin launched earlier this month, and DeepSeek’s R1 in January, which provided decrease charges in contrast with what business chief OpenAI was charging individuals to make use of ChatGPT.
Open supply AI fashions can be utilized totally free, and even altered and distributed, with out particular permission from the creator. Customers who decide to not obtain the mannequin can entry them by way of the cloud and pay per use.
High quality knowledge is the brand new gold
Many companies are realizing they should have higher knowledge to be able to apply AI successfully. It is a foundational layer that is seeing large demand, similar to chips, even when monetization of the AI software takes time.
Chinese language startup DeepExi, backed by enterprise capital corporations Hillhouse and BAI, says its AI system combines business-specific knowledge evaluation with AI fashions to “ship zero hallucination outputs.” Meaning the system doesn’t make up outcomes, as generative AI fashions are fairly vulnerable to do. CNBC was unable to independently confirm the declare.
DeepExi lists shoppers corresponding to Han’s Laser Know-how and an unnamed public healthcare operator “that oversees 40 public hospitals and 100 clinics.”
The startup’s income surged by 88.3% to 242.9 million yuan final 12 months, DeepExi stated in an April filing with the Hong Kong Stock Exchange for a deliberate itemizing.
Information labeling, or annotating bits of knowledge for higher AI use, can be seeing surging demand.
Beijing-based Haitian Ruisheng final week estimated its income within the first half of 2025 grew by not less than 61% from a 12 months in the past to 148.9 million yuan. Its income in 2024 was almost 240 million yuan.
After excluding objects, revenue is predicted to have greater than doubled to between 4.5 million yuan and 4.9 million yuan within the first half of the 12 months, according to the company’s filing with the Shanghai inventory trade.
Haitian Ruisheng counts ByteDance, Alibaba, Tencent, Baidu and a number of other U.S. “Magnificent 7” corporations corresponding to Microsoft and Amazon as shoppers, Zhang Zhe, the corporate’s secretary to the board, stated in Mandarin, translated by CNBC.
In China, the corporate sees the best monetization alternatives in schooling, healthcare and tourism, Zhang stated, including that there was additionally potential in smartphones and “embodied intelligence” — a class that features robots.
Haitian Ruisheng combines automated knowledge annotation with analysis by human specialists, Zhang stated, including that AI requires world cooperation and his firm was eying abroad markets, with a subsidiary in Singapore.
Going world
Simply days after the U.S. unveiled its AI motion plan, the Shanghai-based “World AI Convention” opened Saturday with Chinese language Premier Li Qiang saying plans for a global AI cooperation organization. China referred to as for supporting AI integration throughout industries, together with manufacturing, healthcare, schooling and agriculture.
Tencent has already taken steps in that course.
It has native partnership in Japan for a “digital human service” that home companies should purchase, Wu stated. That is a digital avatar of a human, usually used for livestreaming and different digital content material.
Different standard AI enterprise traces in areas corresponding to Southeast Asia embody “know your buyer” identification verification for finance, translation providers in addition to a platform for builders to develop AI brokers, Wu stated.
With these enterprise initiatives — and broader state-backed ambitions — China has clearly gone past the labs within the world AI race.
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Have to know
No U.S.-China commerce truce extension but. A attainable extension of a tariff pause between Washington and Beijing is not going to be agreed to till President Donald Trump provides his nod, U.S. negotiators stated Tuesday.
At the least 30 individuals die in torrential rain. State media reported the deaths on the outskirts of Beijing after the capital metropolis issued a purple alert for heavy rain on Monday. President Xi Jinping called for more work on flood prevention and catastrophe reduction within the broader northern area.
China ramps up assist for births. The nation on Monday introduced the equal of about $500 a year per child beneath the age of three, following plans to roll out free preschool schooling.
Within the markets
Mainland China and Hong Kong shares have been combined Wednesday as U.S. commerce talks with China cling within the stability.
Mainland China’s CSI 300 rose 0.51%, whereas Hong Kong’s Hang Seng Index — which incorporates main Chinese language corporations — was 0.45% decrease as of 10:07 a.m. native time (10:07 p.m. ET on Tuesday).
The mainland benchmark has gained greater than 5% to this point this 12 months, knowledge from LSEG confirmed.
The efficiency of the Shanghai Composite over the previous 12 months.
Developing
July 31: Politburo assembly anticipated
Official PMI for manufacturing, providers
Nio to formally launch Onvo L90 electrical automotive
Aug. 1 – 4: China Pleasure gaming convention in Shanghai
Aug. 1: S&P International China Common Manufacturing PMI
Aug. 5: S&P International China Common Providers PMI