6 Chinese AI tigers 'transform into cats'

Deepseek was a "shock" to Chinese AI startups. Photo: Abc .

On its second anniversary, Baichuan – one of China's "Six Tigers" of AI – changed its direction. CEO Wang Xiaochuan emphasized the need to reduce unnecessary activities and focus on the healthcare sector. This is in stark contrast to its initial vision of building a Chinese version of OpenAI.

Similarly, Zero One, another member of the group founded by Kai-Fu Lee, also announced a shift towards a "small but mighty" strategy. The start-up abandoned its initial ambitions, building an AI 2.0 platform and accelerating the emergence of AGI (Universal Intelligence). According to Xpin, this trend reflects how tigers have now "turned into kittens."

The DeepSeek shock

In fact, this shift began before the public even realized it. According to tech expert Wang Wenguang, author of "The Big Model of Knowledge Graph," many Chinese companies have abandoned LLM training due to the exorbitant costs.

By January, when DeepSeek R1 launched, most small and medium-sized enterprises (SMEs) realized they were completely out of touch. This upheaval caused the six tech giants to shift their focus from AGI development to other areas.

Baichuan and Zero One abandoned the pre-training model, focusing instead on medical AI. MiniMax scaled back its B2B segment, shifting to overseas markets with video creation applications. Zhipu AI, Moonshot AI, and Character AI remain active in the open-source community, but none have yet surpassed DeepSeek R1.

Baichuan has successfully raised hundreds of millions of USD in funding. Photo: TMTPost.

Currently, the "6 Tiger Cubs" are focusing on the B2B SaaS (Software as Service) market – considered the "least innovative" in the AI field. However, this market is also full of challenges. Wang Wenguang points out that the platform for developing large-scale language models has relatively low technical barriers to entry.

"It took me about six months to develop such a platform myself. I think this product would be difficult to monetize through a company, but an individual operating it could still make a small profit."

There are currently about a thousand similar platforms on the market, and they are very easy to copy. I collaborate with B2B businesses, providing services for only 40,000-50,000 RMB – a price that large companies cannot compete with,” Wang said.

What does the future hold for Chinese AI?

Experts agree with Kai-Fu Lee's assessment that in the future, only DeepSeek, Alibaba, and ByteDance will continue to develop platform models in China.

"Startups that continue to pursue LLM technology will all fail. The most promising are definitely DeepSeek, followed by Alibaba and ByteDance. The leader is expected to capture 50-80% of the market share, while the rest could take 10%. The core issue is who creates AGI first; that company will be the ultimate winner," commented Jiang Shao, an AI expert at a financial firm.

DeepSeek, Alibaba, and ByteDance are three companies with opportunities in the AI platform sector in China. Photo: Japantimes.

DeepSeek is leading the way with its advantage of technical idealism, a talented team, and significant resources. Wang Wenguang commented that the company could achieve the number one position globally if it wanted to commercialize.

According to Xpin, when it's difficult to determine the winner, data becomes the most important factor. "To gain a competitive advantage, the deciding factor is what data you possess, because anyone can use the model," emphasized Gao Peng, a technology expert at Alibaba.

Whether developing a platform model or focusing on B2B, AI startups struggle to achieve miracles. Without data or years of accumulated experience, they cannot create a competitive advantage. This has led China's six "AI tigers" to narrow their ambitions and seek opportunities to survive in a volatile AI market.