The Battle of DeepSeek Alibaba Tiktok Tencent

Internet Companies Continue to Increase Investment in AI

Behind Tencent’s launch of the Hunyuan Turbo S model lies the increasingly fierce competition in China’s internet industry for AI dominance. Recent update in China AI industry reveals the latest investment in AI by China Tech Giants.

Recently, Tencent’s first AI-native app, YuanBao, surpassed Doubao, rising to second place on China’s Apple App Store free download rankings, while DeepSeek continues to hold the top spot.

Since 2025, China’s AI models have rapidly advanced through algorithmic and engineering innovations:

• DeepSeek-R1 has achieved reasoning capabilities comparable to OpenAI’s GPT-4o, while maintaining a lower cost.
• Alibaba released Qwen2.5-Max, a trillion-parameter MoE (Mixture of Experts) model.
• Doubao, leveraging ByteDance’s ecosystem, continues to enhance its AI capabilities.
• Tencent’s Hunyuan AI models have been deeply integrated into WeChat and other business applications.

Alibaba’s AI Strategy for the Next Three Years

Alibaba has announced that over the next three years, it will increase investments in three core AI areas:

1. AI and cloud computing infrastructure
2. AI foundational model platforms and AI-native applications
3. AI transformation and upgrades for existing businesses

Alibaba also stated that its investment in AI and cloud infrastructure over the next three years will exceed the total investment made in the past decade.

Changing Competitive Landscape in China AI

A Goldman Sachs report highlights that, as AI technology rapidly evolves and expands into new applications, the China AI and Chinese internet industry is splitting into two major camps:

• AI Infrastructure (companies focused on foundational AI technology and cloud computing)
• AI Applications (companies integrating AI into consumer-facing products and services)

Goldman Sachs believes this 2 giants will dominate the battlefield of China AI:

• Alibaba, with its strong cloud computing foundation, is emerging as a key player in AI infrastructure.
• Tencent, with its powerful ecosystem of consumer applications, is positioned as a leader in AI-powered applications.

YuanBao: A Key Player in AI Applications

By leveraging its strong consumer ecosystem and user experience, Tencent is deeply embedding AI into daily life. The rapid rise of YuanBao reflects Tencent’s strength in AI applications.

The report highlights that YuanBao integrates DeepSeek-R1 powerful reasoning capabilities with Tencent Cloud’s AI infrastructure. This combination not only enhances user interactions but also enables more precise content delivery and efficient task execution through WeChat’s ecosystem.

The advancement and big leap in China AI technologies by some internet giants in 2025 suggests that investors should not omit them. These companies may have a good potential to beat the magnificent 7 in Nasdaq, so keep an eye on them!