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By Malik Shahzad Aslam :
As China prepares for the Lunar New Year holidays beginning this weekend, the country’s artificial intelligence industry is entering a new phase of competition, with several major firms racing to unveil advanced models in response to the rapid rise of DeepSeek.
The Hangzhou-based startup is widely expected to release its next-generation V4 model soon, according to technology reports, while industry watchers are also anticipating the arrival of R2, the successor to its highly successful R1 system. DeepSeek made global headlines last year when its R1 and V3 models helped its AI assistant surpass ChatGPT as the top free app on Apple’s US App Store.
Fueling further speculation this week, DeepSeek expanded the “context window” of its chatbot — the amount of information it can process in a single session — from 128,000 to one million tokens, enabling the system to handle book-length inputs in a single query.
ByteDance
ByteDance, the parent company of TikTok, is preparing an upgraded version of its popular chatbot Doubao, currently China’s most-used AI assistant by active users.
The company recently released Seedance 2.0, a video-generation model that quickly went viral on Chinese social platforms and attracted praise on X, including from its owner Elon Musk. The system can generate cinematic-quality videos from minimal text prompts. ByteDance also rolled out Seedream 5.0 Lite, a new image-generation model.
Alibaba
E-commerce giant Alibaba is gearing up to launch Qwen 3.5, following the success of its Qwen 2.5-Max model, which was released shortly after DeepSeek’s breakthrough last year.
Alibaba’s Qwen app has seen a sharp rise in domestic usage after the company spent 3 billion yuan on a nationwide coupon campaign promoting AI-powered shopping, a concept it calls “agentic commerce,” where virtual assistants manage online purchases for users. The campaign reportedly generated over 120 million orders in less than a week.
Zhipu and MiniMax
AI startup Zhipu AI released its open-source GLM-5 model this week, focusing on improved coding capabilities and long-running autonomous tasks. Zhipu is regarded as one of China’s leading “AI tigers” and recently listed on the Hong Kong Stock Exchange.
Rival firm MiniMax also launched its M2.5 open-source model, while continuing to expand its consumer applications such as Hailuo AI, a video generation tool, and Talkie, a virtual character interaction platform.
Tencent and iFlytek
Tech heavyweight Tencent introduced a compact AI model, HY-1.8B-2Bit, designed to run efficiently on mobile phones and consumer devices with limited storage.
Meanwhile, iFlytek released Spark X2, an AI system trained entirely on domestically produced chips, with applications in education, healthcare, automobiles, and intelligent agents.
NetEase Youdao and Dexmal
Education-focused firm NetEase Youdao launched LobsterAI, a desktop personal assistant capable of performing tasks such as scheduling, research, and data analysis directly on a user’s computer.
Embodied intelligence startup Dexmal unveiled DM0, a specialised model designed for robotics, combining multimodal internet data with navigation and operational training across multiple robot platforms.
With DeepSeek preparing its next major release, analysts say China’s AI sector is entering one of its most competitive periods yet, as firms compete for user attention, investment, and leadership in both domestic and global markets.
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