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BEIJING — As Chinese enterprises navigate the complexities of U.S. tariffs, a significant shift has occurred since President Donald Trump’s initial term: the rise of generative artificial intelligence (AI).
In recent weeks, multiple Chinese companies have announced the development of new AI-driven products or highlighted ways they are monetizing this technology.
For instance:
The short-video platform Kuaishou reported on Tuesday that its AI video generation tool, Kling, has generated over 100 million yuan (approximately $13.78 million) since its launch last summer.
Last week, Tencent unveiled updates to its AI model for creating 3D visuals, which can be applied in gaming and 3D printing, while also releasing the complete version of its Hunyuan T1 reasoning model. Earlier this month, Tencent integrated T1 into its Yuanbao chatbot app, which connects users to resources like DeepSeek’s R1.
The company’s daily active user count for Yuanbao surged by 20 times within a single month, according to recent statements. Tencent also shared insights into how farmers leveraged the AI application to analyze soil conditions for optimal planting decisions.
Baidu introduced new tools this week that empower users to create websites and simple games through conversational prompts, eliminating the need for traditional coding skills. Meanwhile, Kunlun Tech, the parent company of the Opera browser, has enhanced its Mureka app to enable AI-generated music production.
Maxwell Zhou, CEO of DeepRoute.ai — a company focused on autonomous driving solutions — noted that China’s stronghold as a manufacturing hub gives it significant advantages in “physical” AI. This advantage stems from a vast array of machines capable of collecting valuable data necessary for training industry-specific models. Zhou recently announced that DeepRoute.ai is developing a system for autonomous delivery vehicles, allowing users to transmit simple voice commands like “pick up coffee from this store and deliver it to my apartment.” He expressed optimism for the system’s operational launch in China by early next year.
While the ultimate success of various AI firms remains uncertain, analysts predict that Chinese companies may benefit substantially from AI applications. These tools have the potential to reduce operational costs and help mitigate some economic strains.
Ding Wenjie, an investment strategist at China Asset Management, indicated that the cumulative effects of these technologies are boosting prospects for corporate earnings growth in China in the upcoming year. Earnings performance will provide critical indicators of whether the Chinese economy is genuinely rebounding, especially amid the challenging backdrop of tariffs and trade restrictions.
Goldman Sachs projected in early February that a 20% increase in U.S. tariffs on Chinese imports could lead to a 5% reduction in corporate earnings in Hong Kong dollar terms.
However, the implications of U.S.-China relations extend well beyond tariffs.
Following a recent visit to China for a conference, New York Times columnist Thomas Friedman concluded that the critical discussion points for the U.S. and Chinese leadership should center on the development of human-level AI rather than solely focusing on tariffs or Taiwan. Friedman likened the potential for U.S.-China cooperation on AI to the historical nuclear arms control agreements between the Soviet Union and the United States.
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