Chinese artificial intelligence (AI) app developers are increasingly turning their attention to overseas users as the domestic market environment becomes more competitive, according to industry insiders.
China's biggest tech companies and startups are rushing to release hundreds of large-scale language models (LLMs) and related apps, but convincing Chinese enterprise users and consumers to pay for these services has been tough, leading some companies to look overseas for growth.
According to a recent survey by Unique Capital, 103 of the 1,500 AI companies operating worldwide are from China, but they are beginning to expand into overseas markets.
For example, Alibaba Group Holding Ltd. last year launched SeaLLMs, a model tailored for the Southeast Asian market, to align with its e-commerce and cloud-computing businesses in the region. Alibaba owns the South China Morning Post.
TikTok's owner, ByteDance, has consumer apps for global markets, including AI homework helper Gauth, interactive character app AnyDoor, and AI bot platform Coze. Minimax, one of China's leading AI startups, has also launched Talkie AI for international users.
Industry insiders said that amid fierce competition at home, overseas markets offer greater growth potential.
“Overseas users are more willing to pay for software and have a larger base of experts who can provide valuable feedback,” said Ryan Zhang Haoran, co-founder of Motiff, a developer of an AI-powered user interface design tool that launched in June. Mr. Zhang noted that Motiff has been pursuing business opportunities both at home and abroad since its inception.
“Utility-focused tools are well-suited for global markets with low demand for customization,” Zhang added. Motiff's platform, which supports team collaboration and AI-assisted design and generation, has quickly secured an initial group of users in the U.S., Japan, Southeast Asia and Latin America at a price about 20% of that of current market leader Figma.
Beijing-based Kunlun Tech, which runs the Opera web browser and once owned gay dating app Grindr, is a veteran of Chinese tech companies expanding overseas. Chief Executive Officer Fan Han said the competitive environment overseas is getting tougher as Chinese rivals expand overseas.
“AI-generated content (AIGC) is sending shock waves through the content industry by radically lowering the barriers and costs for creators,” Fan said. Recently, Kunlun has rolled out a series of AI-powered applications, including music streaming service “Melodio,” AI-powered music production platform for commercial users “Muleka,” and short drama production platform “Skyreels.”
“We are focusing on markets with higher average revenue per user, such as North America, Europe and Japan,” Fan said.
A widening technology gap fuelled by tensions between Washington and Beijing is forcing Chinese developers to navigate the politics of a rapidly changing environment, particularly in the areas of semiconductors and AI.
In response, some Chinese companies have tried to hide their origins: Shenzhen-based generative AI startup HeyGen, for example, has relocated to Los Angeles to encourage Chinese investors to invest in U.S. companies, a move aimed at severing ties with mainland China amid increased scrutiny from both Beijing and Washington.
“Compliance is crucial. Entering a new market means adhering to its regulations,” said Motiff's Zhang, who added that while the company's products are consistent globally, its infrastructure adapts to different markets using different open source models and cloud services.
Fan said Kunlun's domestic products prioritize “efficiency,” but overseas the team is experimenting further with AIGC tools and different business models. For example, in the company's Mureka app, users pay a fee for access to AIGC tools and can sell AI-created music. The platform receives a commission for each transaction.
Fan said that while China's AI technology still faces challenges in areas such as chip development and computing power, Chinese companies are better at developing consumer applications and have a keen sense for commercialization.