Blazing hot IPOs, an AI agent craze, and a new word for ‘token’: Here’s what’s happening in the world of Chinese AI

China now has a word for token: ciyuan.

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Liu Liehong, the administrator of China’s National Data Administration, the country’s main data regulator, unveiled the term at a State Council press conference in March, explaining that tokens were now “the settlement unit linking technological supply with commercial demand.”

The National Data Administration disclosed that China now processes 140 trillion tokens every day, up from just 100 billion at the start of 2024. Chinese AI models have now surpassed U.S. models on OpenRouter, a popular marketplace for AI models.

Investors have bought into the AI boom. IPOs in Hong Kong are at a five-year high thanks to a steady stream of Chinese AI and tech startups, including AI labs MiniMax and Zhipu AI, and chip designer Biren.

“We believe that China is the big winner in this tech war for a number of reasons: valuation, wider adoption of AI, an advantage in power generation,” Mohit Kumar, Jefferies’ global macro strategist, told Fortune in mid-March at the bank’s Asia Forum in Hong Kong.

China’s goal is now to build a “token economy,” backed by a proliferation of efficient, open-source models and a push into real-world AI applications. Yet like their U.S. peers, Chinese firms are grappling with expensive research costs and heavy capital expenditure pledges, while also fending off Washington’s export controls, designed to keep them one step behind in the chip race.

Big tech pivots

The AI boom rescued China’s big tech companies from years of regulatory purgatory.

Alibaba, the e-commerce giant, has invested in open-source models, which can be downloaded and modified freely by developers. That low barrier to entry has made its Qwen models a compelling option for startups unwilling to pay for proprietary models from OpenAI and Anthropic. Qwen has won over developers from Southeast Asia to the Middle East, and it’s also convinced Western users too: Meta’s most recent model, Muse Spark, is trained partly off of Qwen.

Unlike Alibaba, ByteDance has largely kept its AI models proprietary, instead leveraging its product design and consumer experience strengths to win users. The company’s chatbot, also called Doubao, is China’s most-used AI app, with 100 million daily active users over the Chinese New Year holiday in February.

Tencent, which operates the ubiquitous WeChat messaging platform, has been a step behind its rivals when it comes to AI. The company launched ClawBot in March, which appears as a contact within WeChat, allowing its over one billion monthly active users to connect directly with OpenClaw and execute tasks through the messaging interface.

Competition is fierce within China’s tech sector. Last week, Alibaba revealed its newest video generation model, Happy Horse, which performs better than the current leader, ByteDance’s SeeDance, according to some analyses.

And there’s still potential for another big tech company to shake things up. Xiaomi and Meituan, better known for smartphones and food delivery respectively, have launched their own large models.

Smaller startups

A new generation of Chinese AI startups are also winning converts in Silicon Valley.

When vibe-coding startup Cursor launched Composer 2, its latest coding service, eagle-eyed users discovered that the model had been built on Kimi K2.5, an open-source model from Beijing-based Moonshot AI. Cursor’s co-founder later acknowledged it was “a miss to not mention the Kimi base…from the start.”

Two other startups—Knowledge Atlas, better known as Z.ai, and MiniMax—have already listed in Hong Kong, giving some rare visibility into the economics of a frontier AI lab.

MiniMax reported $79 million in 2025 revenue, a 159% year-on-year jump, with 70% coming from overseas markets in an early signal of global appetite for Chinese foundation models. Yet it also posted an adjusted net loss of $250 million. Zhipu AI generated 724 million yuan ($104.8 million) in revenue, 132% higher than the year before, but its total losses ballooned to 4.7 billion yuan ($680 million), driven by R&D spending that jumped 45%.

Investors don’t seem to mind the massive losses. Zhipu’s shares are up more than 570% from its IPO price; MiniMax has risen more than 470%, at one point briefly exceeding the market cap of Baidu. Still, both stocks have swung wildly, rising and falling by double-digit percentages in single sessions.

Moonshot AI, backed by Alibaba and HongShan, is reportedly weighing a Hong Kong IPO, coming just a few months after a January funding round that valued the startup at $10 billion.

One startup that’s been notably quiet this year is DeepSeek, the Hangzhou-based lab that reset the whole AI conversation last year with its V3 and R1 models. Developers are eagerly awaiting the public release of V4, the latest version of its model.

Physical AI

China is also surging ahead in physical AI, backed by supply chains that can cheaply manufacture advanced technology.

Unitree Robotics, perhaps China